What Does the Economic Downturn Mean for Seniors?

A supplement to the book "Aging in Stride"

During the current economic crisis, seniors who live on a fixed income from retirement accounts and Social Security have been especially hard hit by rising prices and the stock market plunge.

The current economic crisis has dominated the headlines for months now, and you may have seen coverage of how the situation is impacting seniors. Here is a small sampling of news stories from the past few months:

• In September 2008, the AARP Public Policy Institute released "A First Look at Older Americans and the Mortgage Crisis," which demonstrates the significant impact of the housing crisis on older adults.
  
  
• On September 5, 2008, USA Today discussed a growing issue for older adults in "Bankruptcies Soar for Senior Citizens."
  
  
• "Through the Cracks," appearing in the October 5, 2008 Boston Herald, shows how seniors must make rough choices when the price of almost everything is rising.
  
  
• "In Sour Economy, Some Scale Back on Medications," appearing in the October 21, 2008 issue of the New York Times, reported that Americans—especially seniors—are cutting back on prescription medications, endangering their health and often resulting in even higher healthcare costs.
  
  
• The October 18, 2008 issue of Newsweek featured "Ready To Move, Stuck In One Place," describing how the housing market plunge is especially painful for senior citizens who are ready to move into retirement communities but can't sell their homes to get there.
  
• The November 21, 2008 issue of the New York Times also examined the situation of older adults who are unable to make the move, in "Unable to Sell Homes, Elderly Forgo Move to Assisted Living." 

As these stories show, with the steadily rising prices of home heating, healthcare, food and fuel, seniors who live on a fixed income from retirement accounts and Social Security have been especially hard hit by the economic situation. They have cut back on necessities such as meals, health care appointments and medications.

Baby Boomers and younger seniors also face a sobering situation as they have seen the value of retirement accounts plummet. Many are delaying previously planned retirement, or are leaving retirement to go back to work. A rising number of older adults are staying in their houses rather than making a preferred move to a retirement community, finding themselves unable to sell their homes in today’s market.

Adding to the crisis, lowered tax revenue, budget cuts and soaring operational costs are stretching the resources of the social services and charitable organizations which serve the needs of the most vulnerable seniors.

What Should Seniors, Loved Ones Do?

People with retirement accounts should speak to their financial advisors about the best strategy. Many Boomers are advised to continue working while retirement accounts recover. For current retirees, taking a part-time job if possible can help ends meet. (This news isn't all bad—a side benefit of working is that it encourages staying active and connected in the community.)

Families and friends of frail and disabled elders should help ensure that they are accessing all possible services. To find out about food stamps, assistance with heating bills, caregiver support and other senior support programs, visit Benefits Checkup, a service of the National Council on Aging. Also see the "Online Information Center" for nationwide resources and links to organizations that can help people with a wide array of health conditions and other issues.

Many experts believe that family caregivers will be called upon more than ever to pick up the slack in caring for older loved ones. For seniors who live alone or with family, look into support services such as adult day care, home care and home modifications.

Take Action Now to Protect Seniors!

No one can predict for sure what the future will hold, or how long the existing economic situation will persist. But older Americans have worked hard all their lives and now it's time for us to go to bat for them. Remind your legislators not to cut programs that support our most vulnerable citizens. You can find contact information for your state's officials on the USA.gov website. 

A Small Silver Lining?

There is a bit of good news on the horizon: economists note that for people on a fixed income, deflation may actually mean a relief in prices. And, in 2009, the Medicare deduction from Social Security will not increase. In addition, Social Security recipients will see a 5.8% increase in the monthly benefit in 2009—the largest increase in some time.

To Learn More

The Urban Institute recently released the report "How Is the Economic Turmoil Affecting Older Americans?" The study examines the impact of the ongoing economic turmoil on seniors' retirement savings, home values, and retirement decisions.

For more about the new face of employment versus retirement, see "Living Longer, Working Longer" in AARP International, which offers thoughts from Angel Gurria on attitudes and employment practices with respect to work at an older age. Gurria says, "We should be able to enter a virtuous circle where longevity promotes activity, and activity, in turn, promotes wealth and well-being."

By Joyce Remy, Editor, and Dennis Kenny, Co-Author, Aging in Stride–Plan Ahead, Stay Connected, Keep Moving. Copyright, 2009.