Also troubling for this age group is the fallout from the housing bust. The same 45-60 year old adults who have been diligently building their retirement nest eggs have also been building equity in their homes - many of which have plummeted in value since 2008. As so many financial experts remind us, a home is the only appreciating asset most of us will ever own. Homeowners whose equity has taken a hit - particularly the older homeowners in this age group - must now hope for home values to rise so that they can cash out when the time comes. Another painful reality for this age group is that one of the few positives of the fallout - lower mortgage rates - are not especially helpful to those who have ten to twenty years or more already invested into one home.

Well-prepared individuals notwithstanding, the near future looks bleak indeed for adults aged 45-60.

Adults aged 50-64

Of the 2,969 adults interviewed during Pew’s nationally representative phone survey, adults aged 50-64 report still more pain relating to stock market and pension losses. More specifically:

“Two-thirds of adults ages 50-64 say they lost money in the past year in mutual funds, individual stocks or 401(k)-type retirement accounts. Of those who report such losses, two-in-ten say they lost more than 40% of their investments’ value and nearly four-in-ten say they lost 20% to 40%.”

Adults in the 50-64 age group are uniquely exposed to this risk in a way that much younger and much older adults are not. Younger adults in the 18-35 range, for example, either had far less money invested in stocks or abundant time in which to recoup their losses. On the other hand, adults 65 and over (as we will see shortly) have generally cashed out of their stock portfolios or transferred their money into more conservative vehicles like bonds before the recession hit. Unfortunately, those 50-64 are generally not ready to retire and as such, a disproportionate amount of their wealth remained in stocks to be eaten up by the crash. It remains to be seen how the market fares in the precious few years these adults have before age 65.

Adults aged 65+

Most research on recessionary impact on age groups concurs that adults 65 and over have suffered the least. Pew states that this age group has “escaped the full fury” of the recession by virtue of already having retired and downsized their lifestyle. The website reports on what has been, for this age group, a “kinder and gentler recession.”

“They are less likely than younger and middle-aged adults to say that in the past year they have cut back on spending; suffered losses in their retirement accounts; or experienced trouble paying for housing or medical care. They’re more likely to report being very satisfied with their personal finances. And they’re less likely to say the recession has been a source of stress in their family.”

Simply put, adults 65 and older got out before the bomb went off. As a group, these adults possess enough of their wealth in liquid, spendable form (or in non-affected vehicles like annuities) to be relatively insulated from day to day stock price movements or fluctuations in unemployment. As is typically the case with recessions, those least affected are those at the opposite poles of the age spectrum - high school teens and college aged adults on one end, and retired senior citizens on the other.

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