Financial Crisis Hurts Seniors the Most

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 home-sharing 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 U.S. 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.

Comments

[swaps:]

Elselwhere I have seen that Social Security checks would now be twice as large as they are now if the government had not understated true inflation since the early 1990s.
If more money was going to seniors now they would be helping to jump start the economy. That money would be more effective for the broader economy than the trillions that was dumped into who knows whose hands.
There is something morally wrong with a nation that says it can't afford health care for all, but can afford a wastefull, destructive war againt two third world countries, neither of whom physically attacked the U. S. ever.
The endemic class warfare in which welfare is lavishly bestowed on corporations and the al

Jul 05 10:10 AM

[swaps:]

That got errantly published prematurely. Oh well, I will not finish the thought.

Jul 05 10:11 AM

[joeflynn:]

Look the government does not owe Seniors the pensions promised. The benefits promised exceed the monies recieved in tax payments. The pensions (social security checks and medicare) are taxes on future production and workers. If the government pays the "seniors" what was promised then the future tax burden will crush the economy. If the government does not increase taxes to pay for it but prints money instead then inflation will ensue. If everyone was honest we would tell the truth that the benefits promised have to be reduced to a level that the economy can pay for it. As for medicare 80 percent of all expenditures are spent in the last two years of life. To save 80 percent we need and will eventually deny health care to the elderly and sickest as they approach death. Did you get that? To save 80 percent of Medicare expenditures we have to honor the process of life and death. We have to let sick people die without all the expensive medications and surgical procedures that only enrich the health care industry.

Jul 14 01:32 AM