The perfect economic storm that has swept across the economy in the past year has largely bypassed older Americans.
Slightly more than a third of all adults 65 or older report they have had to cut back on household spending in the past year, compared with nearly two-thirds of other adults. Only 7% of older adults report they have had trouble getting or paying for medical care. In contrast, adults younger than 30 are nearly four times as likely to report they have had trouble securing affordable medical care, while those 30 to 64 are about three times as likely to have had difficulties in this area.
Older Americans also fare relatively better on another measure of financial strain. Fewer than half (43%) of all older Americans report they have lost money in mutual funds, stocks or retirement funds such as 401(k) accounts in the past year, compared with 51% of other adults. Not only that, but older adults who had investment setbacks appear to have lost proportionately less money than other Americans; among those whose investments have shrunk in value, slightly more than half (54%) of those 65 or older lost 20% or more, compared with 64% of other investors.
Overall, three-quarters of adults 65 and older report they are satisfied with their personal financial situation, compared with roughly two-thirds of other Americans. And a third of older adults (33%) report they are “very satisfied” with their finances, compared with 22% of those younger than 65.
That is not to say that older adults are entirely recession-proof. More than a third say they have trimmed household spending in the past year. Nearly four-in-ten (38%) older adults say the recession has caused stress in their families. And a majority (56%) predicts that the recession probably will make it harder for them to take care of their financial needs in retirement.
Still, older adults are the least likely of any age group to say they will be adversely affected by the current economic downturn. Even adults under 30, who presumably still have decades to make up any recession-related financial reversals, are more likely than those 65 or older to say their ability to finance their retirement will be hurt by the recession (66% vs. 56%).
When the older age group is divided into those who are ages 65 to 74 and those who are 75 or older, the story remains largely the same: Even those in the oldest age group have fared significantly better in the past year than younger Americans. Moreover, there is little difference between the two older groups in terms of the proportions that have had to cut back on spending or had difficulty getting medical care. And seven-in-ten in each group are confident they have enough money to live out their lives.
Older Americans as Seen by Their Adult Children
Can a telephone survey accurately reflect the circumstances of all older Americans, some of whom are too mentally or physically infirm to participate in a poll? To address this concern, the Pew Research survey also interviewed a large sample of adults with at least one living parent 65 or older. A number of the questions were similar to those that were asked directly of adults 65 or older in the telephone survey. In theory, the data based on reports of adult children about their parents should include information on older parents who are physically or mentally unable to participate in a telephone survey. While this design cannot capture data on adults 65 or older who never had children, this sample can be used to complement or confirm basic findings of the telephone survey.
A total of 807 adult children with an older parent were interviewed. As expected, this sample did contain data from adult children whose parents are in failing health or living in nursing homes or other institutional settings.
While there are some differences, the findings based on telephone interviews with older Americans and those based on interviews with adult children tell the same generally positive story about the financial health of older Americans. Nearly nine-in-ten adult children say their older parent or parents have no problems paying their bills (87%), roughly similar to the 84% of Americans 65 or older who report that in the telephone survey. Also, nearly nine-in-ten (86%) adult children are confident their parents will have enough income and assets to last for the rest of their lives. That’s significantly higher than the 73% of survey respondents 65 and older who express that sentiment.
Not surprisingly, the survey found that adults of all ages with lower incomes have struggled the most in the past year.
Three-quarters of all adults with family incomes of less than $30,000 say they have had to cut back household spending, compared with 58% of those making $75,000 or more. Nearly four-in-ten higher-earning adults also report they have had trouble getting or paying for medical care — a problem faced by only 6% of all Americans who are better off financially.
Lower-income adults also are less confident that they will have enough money in their retirement years. About six-in-ten respondents with family incomes less than $30,000 say they are certain they have the financial resources for their later years, compared with 86% of those earning $75,000 or more.
But relatively poor and relatively well-off Americans agree that the recession will make it harder for them to take care of their financial needs in retirement, a view shared by lopsided majorities of those earning less than $30,000 (69%) as well as those with incomes of $75,000 or more (65%).