The recession and weak recovery have been difficult for all Americans, but a new government report suggests that older people may be particularly vulnerable to the downturn’s worrisome effects on long-term economic security.
That’s partly because Americans 55 and older have less time to catch up on retirement savings and recover from housing market losses before they stop working, the Government Accountability Office report found.
In addition, although older workers haven’t been as hard-hit by unemployment, government data show that when they do lose a job, they have a much tougher time finding a new one.
For many older Americans, the most immediate effect of the economic downturn has been the hit to their nest egg. The report noted that many older Americans simply don’t have time to wait for the stock market to recover and home values to start rising again.
That means they may have to delay retirement or resign themselves to living on much less in their golden years.
Meanwhile they have to grapple with how to pay for rising health care costs and may have to make difficult choices between covering medical costs and other expenses.
The report also noted that it has been extremely difficult for older workers who lose jobs to find new ones.
The unemployment rate for Americans 55 and over was 6.7 percent in September, according to the most recent data from the Bureau of Labor Statistics. That’s far lower than the overall unemployment rate of 9.1 percent.
But for workers 55 to 64 years old, the median duration of unemployment is 43 weeks. That compares to an overall median duration of 22 weeks, according to the most recent BLS data.
The report found that in some ways, Americans ages 55 to 64 were hit worse than those who are 65 and older. Household income for 55- to 64-year-olds fell 6 percent from 2007 to 2010, the report found, and poverty rates increased.
For adults 65 and older household income rose 5 percent and the poverty rate declined.
The report also shows that Social Security is a lifeline and safety net for many older Americans. Testimony associated with the GAO report noted that Social Security provides a little more than one-third of aggregate income for households that include someone 65 or older. Not surprisingly, low- and middle-income households are likely to lean much more heavily on Social Security to cover expenses.