Despite the fanfare about the recovering economy, one significant group—Baby Boomers—have lagged behind. In fact, the age group of Americans in their 50s and 60s may be the greatest victims of the recession and its sad aftermath. Caught between supporting their college age or unemployed adult children and caregiving their elderly parents, boomers are reeling from the devastating impact of the financial squeeze.
Let’s look at the reality of being an older worker in this post-recession period. Sentier Research, a data analysis company, shows that they have lost the most earning power of any age group, with household incomes 10 percent below what they made when the recovery began three years ago. Add to this, their retirement savings and home values fell sharply at the worst possible time before they needed to cash out for retirement. Even worse, new research suggests they may die sooner, because their health, income security and mental health were pounded by recession at a crucial time in their lives.
Older workers also face being laid off from industries that are downsizing, such as manufacturing. Their mobility, though, is limited because they are more likely to own their own homes, unlike renters, who can more easily move to new job markets. Once unemployed, access to medical care for older workers dries up. Despite their greater likelihood of being disabled, older workers not yet qualified for Medicare, may have an extensive waiting period before they receive health benefits.
Displaced boomers face age discrimination when seeking new, typically lower paying jobs than their old positions. Employers evaluate the lethal combination of grey hair, aging and potential health risk of this age group, and often choose the younger, more recently trained job seeker. Just one in six older workers laid off in the recession has managed to find another job, and half of that group had accepted pay cuts.
Early applications for Social Security shot up sharply during the recession as people sought whatever income they could find. The penalty they will pay is permanent and substantial, as much as 30 percent less in each month’s payment, compared with those who could wait until full retirement (66 for those born after 1942).
Will boomers be able to adapt and succeed in overcoming this generational squeeze, or will their declining income and status simply be a chapter in the history books?