Older Americans: How They Are Faring in the Recession
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 presented at Capitol Hill.
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 aged 51 and older conducted by the university’s Institute for Social Research (ISR).
"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% to 57% between 2008 and 2009—a very rapid change after a long period of stability," said ISR economist David Weir, PhD, director of the Health and Retirement Study. The chances of working past 62 went up from 60% to 65%.
The survey found what Weir called an "historically unprecedented" exposure to the stock market, with 62% reporting stock holdings in 401(k)s, IRAs, mutual funds, or other vehicles. Reported losses ranged from 20% in IRAs and 401(k)s to 25% in mutual funds, and 30% in stock in single companies.
The survey also found that nearly one quarter of older Americans reported a decline in the value of their home. Slightly less than one half still have home mortgages, and about 7% of these reported that they are "under water," owing more on their home than it is worth. About 3% of those with a mortgage said they had fallen behind on payments, but just three tenths of 1% 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% said someone else in their family had fallen behind on a mortgage."
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.
— Source: University of Michigan