Tuesday, May 13, 2008
The Associated Press reports that baby boomers are increasingly relying on new debt to make ends meet.
Based on the personal saving rate being close to zero for years now and, up until a short time ago, money flowing freely from home equity extraction, it's a good bet that things are not all that different now than a few years ago - it's just a different kind of debt these days:
The economic downturn is hitting roughly one in 10 middle-aged and older Americans especially hard, compelling them to borrow money for everyday living expenses and to seek help from family, friends or charities, according to a survey released Tuesday by the AARP.That statistic on stopping contributions to 401k plans is pretty shocking - that's the kind of thing that it not easily undone once things return to "normal" (whatever that is).
In the telephone survey of 1,002 adults 45 and older, nearly four in 10 said they had helped a child pay bills or expenses. Among retirees, one-third said they'd helped their children pay bills. Eight percent said they'd helped a parent pay bills or expenses. The survey's margin of sampling error was plus or minus 3 percentage points.
One-third of survey participants said they stopped putting money into their 401(k) or retirement account and 14 percent said they had cut back on their medications.
"We have patients coming in fewer times," said registered nurse Tucky Franz of Salisbury, Md. "They'll cut back because of the copay."
The majority of baby boomers said they were finding it more difficult to pay for essentials and utilities, and six in 10 said they had cut back on eating out and entertainment.
The good news is that Wal-Mart sales are picking up - it seems that what money is being spent is being spent with a little less abandon.