'An Especially Rude Wake-Up Call'

Slowly but surely, the contractionary/deflationary tide is rolling in.

Rich and poor, male and female, young and old -- no matter which segment of the population you are talking about, attitudes are changing, by choice or, increasingly, out of necessity.

Gone are the care-free days and free-spending ways. Instead, there is soberness and austerity.

In "Survey: 1 in 10 Boomers Borrowing for Everyday Expenses," the Associated Press' Ellen Simon highlights a few of the new, less pleasant realities.

The economic downturn is hitting roughly one in 10 middle-aged and older Americans especially hard, compelling them to borrow money for everyday living expenses and to seek help from family, friends or charities, according to a survey released Tuesday by the AARP.

In the telephone survey of 1,002 adults 45 and older, nearly four in 10 said they had helped a child pay bills or expenses. Among retirees, one-third said they'd helped their children pay bills. Eight percent said they'd helped a parent pay bills or expenses. The survey's margin of sampling error was plus or minus 3 percentage points.

One-third of survey participants said they stopped putting money into their 401(k) or retirement account and 14 percent said they had cut back on their medications.

"We have patients coming in fewer times," said registered nurse Tucky Franz of Salisbury, Md. "They'll cut back because of the copay."

The majority of baby boomers said they were finding it more difficult to pay for essentials and utilities, and six in 10 said they had cut back on eating out and entertainment.

James Dyas, 75, of Sherman, Conn., said he and his wife go to their favorite Mexican restaurant about half as frequently as they used to. "About all the money we have goes to buying gasoline," he said.

While the survey doesn't show large numbers of people making radical changes -- taking second jobs or moving to a smaller home -- it did find that more than one-quarter of those surveyed are having trouble paying their mortgage or rent.

Compared with older people, a greater percentage of younger baby boomers, those 45 to 54, said they were cutting back on medications, prematurely withdrawing retirement funds and postponing paying bills.

"For the younger boomers, it's been an especially rude wake-up call," said Jim Dau, a spokesman for the AARP, a nonprofit that advocates Americans 50 and older.

Debra Koziol, a 48-year-old hospital finance worker in Rhode Island, said she's started carpooling to work with her sister a few times a week and packing lunch every day.

"The food is better," she said. "Some of this is creating better habits, not so much waste."

Comments

[TomK]

" "About all the money we have goes to buying gasoline," he said."

Let me see: US invaded Iraq because it's supposed WMD threatened security and US needs to secure (wink wink) its supply of oil.

WMD turns out to be a hallucination of the brain dead. Oil jumped to $125/barrel 7 years into occupation. So it's not national security and oil. Then what is it about?

After some thought I concluded that it is about demonstrating a US president can start the most stupid war, violate the single most important UN charter, squander the largest fortune, killed a hundred thousand, and personally gets away with it. Sort of like Emperor Hirohito of Imperial Japan, who did get away with invading the US.

Ah yes, but the nation won't get away with it. Japan suffered tremendously after the war and so will the US.

Paying big bucks for oil is only a little sampler of far nasty things to come. As oil price rise, ever higher percentage of US GDP will go to foreigners to pay for imported oil. And as that percentage rise, the dollar will depreciate, which will fuel an even higher transfer of wealth out of the US. It's a viscous circle that will continue until there is 'balance'. Even the bravest won't want to know what that 'balance' means.

Semi-quoting Winston Churchill about the reckless behavior of the Nazi: This is not the end, nor the beginning. But this is the beginning of the end.

This twenty year cohort for reporting is insane. The half high lighted have little in common with the group ahead of them.

"Compared with older people, a greater percentage of younger baby boomers, those 45 to 54, said they were cutting back on medications, prematurely withdrawing retirement funds and postponing paying bills."

[Waiting for the Other Shoe to Drop]

I read something itersting a while back. It seems local Iraq's think the war is about keeping thier oil in the ground! In fact last time I heard Iraq oil production is down about 1mbpd from before the US invaded. Given the hugh run up in price in the last 6 years, this means that the oil still in the ground is worth more ... alot more.

[roger]

Marketing moguls are masters in the art of motivating self gratification in the minds of the masses all this in the name of free enterprise and profit,guess they are going to have to work much harder now :)

[Jes]

I have to concur with the anonymous commenter who said that the younger boomers have little in common with the older boomers. The younger ones aren't covered by Medicare--it's an apples and oranges situation.
Also, did the phone poll ask whether the financial assistantce from parents is new? I sincerely doubt it is. We've heard for several years now how kids are living longer with their parents and their parents are helping their kids with bills.
There may be truth behind this article, in fact, I suspect parents are hleping out more than they used to, but I would really prefer more assurance that the data was meaningful.

[Jes]

I have to concur with the anonymous commenter who said that the younger boomers have little in common with the older boomers. The younger ones aren't covered by Medicare--it's an apples and oranges situation.
Also, did the phone poll ask whether the financial assistantce from parents is new? I sincerely doubt it is. We've heard for several years now how kids are living longer with their parents and their parents are helping their kids with bills.
There may be truth behind this article, in fact, I suspect parents are hleping out more than they used to, but I would really prefer more assurance that the data was meaningful.

[FB]

There's a video on CNN today:
Strapped boomers put off retirement
http://www.cnn.com/video/#/video/us/2008/05/13/chernoff.delayed.retirement.cnn