Older Americans Have Clearly Changed Retirement
Plans Due to U.S. Financial Crisis
University of Michigan gathered data from over four
thousand age 51 and older for study
Sept. 17, 2009 - Older Americans have weathered the
financial crisis relatively well, although many now expect to work
longer than they did just a year ago, according to a University of
Michigan study released on Capitol Hill yesterday.
The study is based on data from 4,412 older
Americans collected in April and May of this year in a special Internet
survey of respondents of the Health and Retirement Study, a nationally
representative sample of Americans age 51 and older conducted by the U-M
Institute for Social Research (ISR) and funded by the National Institute
on Aging.
"We asked the same older workers what the chances
were that they would still be working full time after age 65, and they
went up from 47 percent to 57 percent between 2008 and 2009a very rapid
change after a long period of stability," said ISR economist David Weir,
director of the Health and Retirement Study. The chances of working past
62 went up from 60 percent to 65 percent.
Weir presented the findings yesterday at a
breakfast on Capitol Hill held to mark the 60th Anniversary of the
Institute, the largest academic social research and survey organization
in the world.
"This study is the first to show a clear change in
work expectations among the same group of older Americans," Weir said.
"The findings provide compelling evidence that people have changed their
retirement plans as a result of the financial crisis."
The survey found what Weir called an "historically
unprecedented" exposure to the stock market, with 62 percent reporting
stock holdings in 401(k)s, IRAs, mutual funds, or other vehicles.
Reported losses ranged from 20 percent in IRAs and 401(k)s to 25 percent
in mutual funds, and 30 percent in stock in single companies.
The survey also found that nearly a quarter of
older Americans reported a decline in the value of their home. Slightly
less than half still have home mortgages, and about 7 percent of these
reported that they are "under water," owing more on their home than it
is worth. About 3 percent of those with a mortgage said they had fallen
behind on payments, but just three-tenths of one percent reported they
had entered foreclosure.
"Many more older Americans are experiencing the
financial crisis through the housing troubles of their children than
through their own difficulties," Weir said.
"Nearly 10 percent said someone else in their
family had fallen behind on a mortgage."
Nearly 24 percent surveyed after the crisis said
they were not satisfied with their financial situation, compared to
about 17 percent when they were surveyed in 2008.
Weir found that the recession and the resulting
financial losses were taking a psychological toll on older Americans as
well. About 53 percent surveyed before the crisis reported experiencing
no symptoms of depression, such as restless sleep, feeling sad, or
feeling that everything was an effort. After the crisis, that percentage
dropped by 9 percentage points, to about 44 percent.
Those reporting four or more symptoms of
depressiona level consistent with a diagnosis of clinically significant
depressionincreased from 11 percent before the crisis to 18 percent
after the crisis.
"Anxiety produced by the financial crisis, whether
about their own situation, their children's or the nation's, is having
an impact on the mental health of older Americans that, if it persists,
could have effects on physical health, as well, given what we know about
the influence of depression on physical health," he said.
However, Weir found no differences in alcohol
consumption among older Americans surveyed before and after the crisis,
suggesting that while people may be feeling more depressed, they are not
changing their core behaviors.
But, Weir said, while older Americans have been
affected by the economic crisis that began last fall, and continue to
feel the effects, they are coping relatively well.
Keep up with the latest news for senior citizens, baby
boomers
Sept. 17, 2009 - Older Americans have weathered the
financial crisis relatively well, although many now expect to work
longer than they did just a year ago, according to a University of
Michigan study released on Capitol Hill yesterday.