Retirement Planning Blog

It has hit the world drastically in an unprecedented manner; it has shaken the whole world as never before. The recent recession has resulted in a series of job loss, financial market loss, drastic fall in the real estate values and a lot more setback. And the wave has also reached to the retirees and also to those who are in verge of their retirements. They are certainly feeling the heat of it.

As the recession destabilizes the world economy, one of the segments that feels its heat at the very first instance is surely the job market. Organizations need to go for cost-cutting, which resulted in cutting down of manpower. Many had to lose their jobs in the recession. According to an AARP survey, 30 percent of the Americans in the age group of 45–64 have escaped layoffs, but have had to settle for a pay cut. 29 percent of them have ceased to contribute to various investments like 401(k), IRA and others. 18 percent have withdrawn their funds from these accounts prematurely. According to the executive Vice President of AARP, Nancy LeaMond, this population of 45 to 64 age-groups is particularly squeezed. This economical downturn has left them in such a squeezed state where they hardly focus on their own financial and retirement security as they have to take care of their aging parents as well as their children.

Recession is also having an impact on the state of health of people, especially to this 45 – 64 population. With a rise in the health cost, they are required to pay more to their health insurance premium. 22 percent have faced this problem where they have been asked by the health insurer or their employer to pay the extra amount. As a result, 9 percent, being unable to pay the higher premium, lost their health insurance coverage. 27 percent are also having problems in paying their medical bills. People have to take some unusual means to cut down the medical care expenses, which may prove to be quite harmful sometimes. Many have cut down their necessary medical or dental work; some cut their pills in half or even skipped the doses.

The impact of recession can also be seen in the driving habit of the seniors. Many have cut down on driving in order to reduce the fuel costs. Some have also opted out of their gym membership.