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A new survey released by AARP shows that Americans age 45 and older are still struggling financially and are forced to make hard decisions about their economic security, despite reports of recent positive changes in the marketplace.
Of those surveyed in AARP Closer LookSM, more than a quarter (27 percent) of individuals age 45 to 64, as well as 38 percent of African Americans and nearly half (43 percent) of Hispanics, report that they still have problems paying for essential items such as food and utilities. In addition, 41 percent surveyed, including over half of African Americans (53 percent) and nearly three-fourths of Hispanics (71 percent) surveyed, were not confident that they would have enough money to cover medical and living expenses in their retirement.
“We know that the people age 45 and older are facing high anxiety in this economy,” said Nancy LeaMond, AARP executive vice president. “The 45 to 64 population is particularly squeezed---they are often trying to take care of the basic needs of their aging parents and their children, and they don’t have the ability in this economy to focus on their own financial and retirement security.”
In their struggle to make ends meet, many are taking a hard look at what is deducted from their paychecks. Individuals surveyed in April 2008, December 2008 and August 2009 consistently report that they have stopped contributing to a 401(k) or IRA in the last year (33 percent, 36 percent, and 30 percent respectively) in an effort to bolster their paychecks. In a further effort to stretch their dollars, 18 percent of individuals age 45 to 64 report that they have prematurely withdrawn funds from their 401(k)s, IRAs and other investments.
The latest survey shows that, in some ways, the job situation for many 45 and over workers has continued to deteriorate over the past year and a half. About one in eight persons (12 percent) age 45 and older reported that they or a family member had lost a job within the past year because of the economic downturn.
For those currently employed, a whopping 22 percent of those surveyed say that they either “had hours cut, had to take a pay cut or lost other forms of work-related income.” The figure for those in the 45 to 65 age group was even higher at 30 percent.
Many older workers now plan to work longer in order to rebuild their retirement savings in the wake of the recession. Of those surveyed, 12 percent said they or a family member had delayed retirement or had returned to work from retirement over the past year. The figures for African Americans (15 percent) and for those aged 45 to 64 (14 percent) were noticeably higher than the average. Adding to the financial burden, 47 percent of people surveyed had lost a substantial amount of savings in the financial markets, with 52 percent of age 45 to 64 reporting losses as they near retirement.
Finally, one of the most startling results showed that, of those surveyed, 47 percent of people 45 to 64, as well as 48 percent of African Americans and 54 percent of Hispanics, reported getting less sleep over the last 12 months due to stress or worry as a result of the economic downturn.
AARP Closer LookSM is the first of a series of quarterly polls of boomers and older Americans planned for regular release by AARP. Visit www.aarp.org/research/surveys/money/econ/trends/articles/closer_look.html to see the survey.
Survey methodology
RDD telephone interviews were conducted from July 22-Aug. 3, 2009 among a nationally representative sample of 939 respondents 45 years of age or older. Of those, 100 respondents were Hispanic and 103 respondents were African American. The margin of error for total respondents is +/-3.20 percent at the 95 percent confidence level.
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