So much for la dolce vita. The number of older Americans who believe they'll be working after the age of 65 rose to 57 percent from 47 percent between 2008 and 2009, according to a new University of Michigan study. Early retirement? Yeah, right. The financial crisis has dimmed that dream too, with the percentage of older workers expecting to work past 62 increasing to 65 percent from 60 percent in the same period, says the national study on health and retirement.
"This study is the first to show a clear change in work expectations among the same group of older Americans," says study director David Weir, an economist at the university's Institute for Social Research. "The findings provide compelling evidence that people have changed their retirement plans as a result of the financial crisis."
With the way the stock market has been misbehaving, it's no wonder. The Internet survey of 4,412 older (51 and older) Americans conducted in April and May finds what Weir terms a "historically unprecedented" exposure to the stock market. Some 62 percent report stock holdings in 401(k)s, IRAs, mutual funds, or other investment vehicles. The study says older Americans report losses ranging from 20 percent in IRAs and 401(k)s to 25 percent in mutual funds. When it comes to stock in single companies, older workers say they have lost 30.
The survey also finds nearly a quarter of older Americans have seen a decline in the value of their home. Nevertheless, their plight is not as dire as for younger homeowners, Weir says. Slightly less than half of older Americans still have home mortgages. Only about 7 percent of these say they owe more on their home than it is worth, or are "under water." The survey says about 3 percent of those with mortgages say they have fallen behind on payments. And just 0.3 percent say they have entered foreclosure. That's far lower than the national foreclosure rate of 2.8 percent, according to figures in the Northern Colorado Business Report.
"Many more older Americans are experiencing the financial crisis through the housing troubles of their children than through their own difficulties," Weir says. "Nearly 10 percent said someone else in their family had fallen behind on a mortgage."
No shocker, then, that the study finds the economic crisis is taking a psychological toll on older Americans. After the crisis, some 56 percent report experiencing some symptoms of depression, such as restless sleep, feeling sad, or feeling that everything was an effort. That compares to only 47 percent before the financial meltdown.
"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," Weir says.
But it's not all bad news for older folks. Comparatively speaking, the core things in their life including health, jobs, and homes are ok, says Weir. "When you are talking about people who are really hurting with lost jobs and lost homes, this is much more the younger ages," he says.
What's more, there are upsides to working longer too. Numerous studies have shown that people who work longer have better general health and mental health outcomes, says Weir. "With people living longer, you have to pay for longer retirement," adds Weir, so having extra cash may not end up being not such a bad thing. Still, not everyone is going to like sucking it up longer. If fewer workers are going to be spending their twilight years on the links, perhaps more employers will at least consider installing indoor putting greens.
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