Tom Murphy
RedwoodAge.com

While boomers and their aging parents agree the economy is in rotten shape - and getting wore, those 45 to 64 may be digging a deeper hole with their short-term solutions.

A survey of 1,002 people by Woelfel Research showed boomers are going so far as to cut back on their medications in reaction to the economic storm brought on by soaring gasoline prices, food inflation, runaway foreclosures, sinking home prices and rising unemployment. The study, funded by AARP, found older folks were keeping a cooler head.

"Retirees and older Americans have had to deal with skyrocketing health care costs on fixed incomes for years," said Tom Nelson, chief operating officer for the nonprofit giant, which lobbies on behalf of older Americans. "For them, the current economic slump means more of the same."

Whether that reflects the mellowing of age or cynical acceptance, it's a better long-term approach than seen among the boomers.

The survey found nearly a quarter of the younger generation was raiding their retirement savings to make ends meet. About 27 percent was delaying payment on bills, and 17 percent said they had cut back on their meds.

"Taking money out of your retirement savings has a compounding effect because that money is not allowed to grow at a time when you have fewer working years to replace the losses," Nelson noted. "Even more troubling, shortchanging your health care can lead to higher health care costs down the road."

Ongoing Worry
Boomers have been worried about their futures for some time. Earlier studies showed many people in the largest generation were fretting they haven't saved enough for retirement. The problem is particularly severe for women. And there are even signs of increased homelessness among elders as social safety nets fall short of the real day-to-day needs of aging Americans.

But both age groups in the Woelfel survey are upset about the current state of the economy, too. The survey showed 81 percent of those over 44 thought the economy is in "fairly bad or very bad" shape and three-quarters of the respondents think things are getting worse. Seventy-four percent think elected officials need to do more to help those in a fiscal pickle.

"The current economic downturn is forcing millions of Americans to make very difficult decisions on their immediate survival and long-term financial security," Nelson said. "They are looking for help, and they want more action from our elected leaders."

Those over 65 are more likely to live on fixed incomes, so inflation tends to hit them harder. And 59 percent of the people in this age group said they're having a harder time paying for food, gas and medicine. More than a third said they've had to help their children pay bills in the past year. And 11 percent said they've had to seek help from charity groups or loved ones in the past 12 months.

About two-thirds of those surveyed own stocks and 72 percent of those investors said their portfolios had shrunken over the last year. Although 58 percent aren't worried about mortgage foreclosures, almost nine out of 10 are worried about the effect the soaring number of foreclosures is having on the broader economy. And 64 percent think foreclosures may hurt their communities.