December 18, 2009
Wall Street has lost ground recently over growing concerns that the consumer is not taking part in the anticipated economic recovery. Some are concerned that older consumers are feeling special pressure.
A recent survey by senior citizen financial resource Golden Gateway Financial found that many older Americans and retirees have made significant changes to their standard of living in the last year. They've adopted what the survey calls a "Recession Lifestyle" that includes spending cuts and concessions in order to make ends meet.
For example, many of those surveyed reported they now helped, or needed financial help from family members. A number of people said they had cut back on what were viewed as "luxuries."
But a few glaring concerns were uncovered, including the finding that nearly 30 percent of participating seniors have sold items to make extra money, or that 27 percent of those surveyed still haven't been able to pay their bills from unexpected medical expenses.
"It's obvious that older Americans and those on fixed incomes are having the hardest time recovering from the recession," said Eric Bachman, founder and CEO of Golden Gateway Financial. "We continue to hear from those in the midst of foreclosure, or those having difficulty making ends meet every month. It's imperative that we spotlight these difficulties and make sure that these individuals know that there are ways they can help themselves."
Participants were asked how their lives and spending have changed as a result of the recession. Overall, the survey found that many are able to make small adjustments that could lead to a larger difference over time.
For example, by focusing on just basic necessities at the grocery store, those on a fixed income can save money for utility bills or put away a few dollars for those unexpected medical expenses.
In terms of medical and health care spending, nearly 25 percent of those surveyed said they have postponed trips to the dentist or optometrist to save money. More than 15 percent have stopped taking certain medications altogether or begun cutting back on the recommended dosage to continue affording their medicines.
More than 17 percent of seniors told surveyors that they have had to take out a loan or trim their budget to maintain their current living situation. Three percent have begun sharing living quarters in order to make ends meet.
If retailers are counting on older consumers to help revive sales, they may be disappointed, according to the survey. More than 25 percent have stopped purchasing all non-essential big-ticket items such as televisions and autos. Even grocery stores may feel the impact, with 16 percent of seniors saying they now purchase only critical items when at the grocery store.
"Unfortunately, the 'Recession Lifestyle' is still all too real for many of our oldest citizens," Bachman said. "It's unfortunate that in what should be the golden years of their lives, they are forced to make concessions just to put food on their tables."
