Older adults in the United States – particularly those close to or in retirement – have been especially hard hit by the recession of 2007 to 2009 because they might not have sufficient time to rebuild their retirement savings, the U.S. Government Accountability Office reported this week.
The GAO said that older adults – generally those 55 and older – could lack the time to rebuild due to the sharp declines in financial markets and home equity and increased medical costs.
Although as a group older workers tend to be less likely to be unemployed than workers in younger age groups, when older workers lose a job they are less likely to find other employment, said the GAO.
“These challenges have intensified older adults’ concerns about having sufficient savings now and adequate income throughout retirement,” said the 52-page GAO report.
The GAO said that since 2007, unemployment rates doubled and remained higher than before the recession for workers aged 55 and older.
The median duration of unemployment for older workers rose sharply from 2007 to 2010, more than tripling for workers 65 and older from 8 to 29 weeks and increasing to 31 weeks from 11 weeks for workers aged 55 to 64.
In addition, the proportion of older part-time workers who indicated they would prefer full-time work nearly doubled during the time.
Further, the GAO found that household income fell by six percent for adults aged 55 to 64, but increased by five percent for adults 65 and older.
Poverty rates increased for adults aged 55 to 64, but declined for those 65 and older, while low incomes were more prevalent in older age groups than younger ones.
About one-third of workers 65 and older are in low-wage jobs – those that paid less than $10.20 per hour in 2007 or $11 per hour in 2010.
“The recession of 2007 to 2009 has had a profound impact on American workers and their families,” said the report. “Many older adults, like other age groups, have lost employment and wealth.
“The major challenges for older adults are that they have less time before retirement to make up for these losses, and they typically face greater medical expenses.”
During the recession, the percentage of adults who began drawing Social Security at age 62 rose as did awards of Social Security Disability Benefits.
Medical costs continued to rise faster than other costs, and older adults continued to spend more on medical care than those in younger age groups.
“Social Security likely helped keep at least some eligible long-term unemployed older adults from falling into poverty,” said the report. “Workers who left the workplace prematurely could face insufficient income at older ages because they may have reduced monthly Social Security benefits and less savings than may be needed over a longer period”
Howard Pankratz: 303-954-1939 or hpankratz@denverpost.com.
