Seniors Most Affected by Financial Crisis
The current economic recession is expected to have a major impact on the way that Americans live for at least a generation. A fundamental shift appears to be underway with individuals seeking to reduce leverage and consume less. 70% of our economy is based upon consumption. For as long as I can remember we have always spent freely and saved very little. Debt was used to finance all major and most minor purchases. Young and old alike both levered up to enjoy the good life. This philosophy worked until the bubble burst in the fall of 2008. The psychological impact of the recession cannot be underestimated. This recession has changed many consumers spending habits forever. Most Americans believe that this economic downturn will have an effect on their quality of life for the foreseeable future.
The people most effected by the financial crisis are senior citizens. Senior citizens rely upon a fixed income to manage their finances and pay their bills. Senior citizens are hurt the most by rising costs because there income doesn’t tend to rise with inflation as wages do. Rising medical costs and shrinking retirement plans are creating problems for seniors. The stock market crash of 2008 has forced many senior citizens to reduce their standard of living. Some have resorted to homesharing by taking in roommates to split costs. Many seniors have been forced to come out of retirement and go back to work.
This problem is not just specific to the US alone. “In England a staggering one in five seniors - 2 million people - are now living below the poverty line. An alarming 22per cent of seniors are skipping meals, and as many as 25 per cent are cutting back on food. In addition, a further 42 per cent are struggling to afford essential items, 41 per cent are reducing the amount of electricity used and 38 per cent are minimising gas consumption. As the rest of the nation struggles with debt during the economic downturn, senior citizens are struggling to maintain basic living conditions.” Senior citizens are forced to work longer for survival. In Japan senior citizens are being enticed to return to the workforce as well.
Some financial experts are saying that the new retirement age will be 70 in the future. Due to this economic setback many people will struggle to have a qualitative retirement that retire at 65. Trillions of dollars of wealth was lost due to the financial meltdowns. IRA’s and 401(k)’s saw their value drop in half. Now there is even talk of raising the age to 70 in order to qualify to get social security. Seniors may have to consider a partial retirement in the future where they work a part time job to supplement their income.
