Financial and Emotional Toll of the Recession on Elder Pennsylvanians

Widener Elder Pennsylvanian Survey Provides Statistical Look at Pa.’s Older Adults

(Chester, Pa., Sept. 27, 2010) —  Widener University released findings from the fifth volume of The Widener Elder  Pennsylvanian Survey, revealing the impact of the recession on Pennsylvania’s elders. Results from this survey, which was completed in May 2010, were compared with those from a survey completed before the recession in May 2007. The comparison shows that both retired and non-retired individuals have experienced financial and emotional losses over the past three years.
                                                        
“We expected our results to reveal that elder Pennsylvanians, just like many Americans, faced unemployment and increased healthcare and financial concerns in the wake of the recession,” said Dr. Eric Brucker, professor of economics at Widener University and principle investigator of the survey. “However, we were somewhat surprised to learn that many of our respondents do not see brighter days ahead. They understand the fundamental problems facing our country and know that these problems will impact their target retirement age, wealth and health for years to come.”

The Widener University Elder Pennsylvanian Survey found that:


o   The non-retired respondents are expecting to work longer and retire later. A majority (54%) of the non-retired said that they planned to retire after age 65 as compared to 46% in 2007. Thirty-two percent of the non-retired indicated that they now plan to work longer than they had two years ago, and 58% of those respondents indicated the reason behind that decision was a significant decrease in their financial wealth.

o   Both retired and non-retired respondents would like to work more if jobs were available. The number of unemployed retirees is approaching 33%, a significant increase from 2007 when it was 14%. More retirees also report that they would like to work but cannot find a job (6%) as compared to those who reported so in 2007 (1%). The unemployment rate of non-retired workers increased slightly from 4% to 5% since 2007, and the number of part-time workers increased from 13% to 19%.

o   Both retired and non-retired respondents are increasingly worried about outliving their savings. The percentage of retired individuals who are worried about outliving their savings before age 75 doubled from 8% in 2007 to 16% in 2010. Furthermore, the percentage of retirees who are not worried about outliving their retirement savings dropped from 69% in 2007 to 49% in 2010. In addition, 32% of the non-retired indicate that they are more worried now about outliving their retirement savings than they were two years ago.

o   Retirees are now more reliant on Social Security for retirement income. Out of all respondents reporting their net worth, 46% indicated that it was less than $50,000. Social Security is the single most important source of retirement income for more than half (52%) of the 2010 retirees, up from 46% in 2007.

o   Healthcare concerns have increased, especially for the retired. The percentage of retired individuals who worry about spending most of their money on healthcare has increased from 14% in 2007 to 20% in 2010. Only 27% of retired and non-retired respondents indicated that their employers provide post-retirement health insurance, a significant decrease since 2007 when the figure was 40%.



“Although the National Bureau of Economic Research recently reported that the recession officially ended in June 2009, this survey shows that Pennsylvania’s elders clearly do not feel as if we’re in a period of recovery,” said Brucker. “In fact, they are more scared than ever.”

Through his studies and work as an economist, Brucker sees a range of issues contributing to the fears of  elder Pennsylvanians. For example, a high unemployment rate has forced many out-of-work elders to dip into Social Security early, forgoing 7-8% of their future retirement income for each year they take it before age 66. He also notes that even though the recession is deemed over, the reality is that the unemployment rate for all ages is likely to remain quite high. In fact, the rate has risen from 9.5 % in June 2009 at the official end of the recession to 9.6% last month.

While a high unemployment rate does not bode well for the financial well-being of Pennsylvania elders, it also does not contribute positively to their emotional and physical health. Survey results show that both retired and non-retired respondents report a slightly diminished sense of the quality of their lives as compared with results from 2007. In addition, the results show a slight decline in their reported emotional and physical health. Worth noting, the most significant drop has occurred in the retired individuals’ self-assessment of the quality of their leisure life.


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About The Survey
The information in this release is based on survey research conducted by Dr. Eric Brucker, with support from the Pennsylvania Department of Community and Economic Development, professor of economics at Widener University. Brucker is the principle investigator on a Pennsylvania Financial Gerontology Survey funded by the Pennsylvania Department of Education, as well as co-author of "The Widener Elder Pennsylvanian Survey: Baby Boomers to Centenarians Vol. V.” The telephonic survey, which was undertaken in May 2010, randomly polled 750 working Pennsylvanians born before 1964, the last birth year of the baby boomers. The survey was structured so that half of those polled indicated that they were retired.

The full survey with results is available upon request.