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Low-Income Adults hard hit by Recession

WASHINGTON, September 2010 -- Lower-income adults are struggling during the recession, according to a new AARP report. Nearly six in 10 Americans age 45 and up who make less than $25,000 a year say they are either "not at all" or "not too" confident they will have enough money to pay medical and living expenses in retirement.

This compares with 36% of higher income adults who feel the same.

More than four in 10 lower-income older adults rate their health as "fair" or "poor," compared to only 18% of those who earn more than $25,000 a year. Additionally, many report they are struggling to meet basic needs, such as paying for food and electricity, heat and water.

"While the recession has been devastating for many older Americans, this recent data indicates lower-income folks are being hit particularly hard," said Jo Ann Jenkins, president of AARP's affiliated charity, the AARP Foundation.

"Each day, millions are choosing between essentials like buying groceries or paying for prescriptions. It's a devastating choice that no one should have to make."

Similar to the general population, lower-income older adults have cut back, but they are doing so in greater numbers.

Nearly 40% had to cancel or postpone needed health care or dental treatments in the last six months -- twice as many as higher-income adults.

Some 23% skipped doses, cut pills in half or did not fill prescriptions, compared with 15% of higher-income people. Lower-income adults are twice as likely to have looked for more affordable housing in the last six months compared to higher-income levels. And half used their car less to cut down on gas costs.

Additional findings for all income levels indicate the continual struggles older Americans are experiencing in tough economic times:

28% stopped contributing to retirement savings in the past six months, and 14% of adults 45 to 64 reported having to prematurely withdraw funds from retirement savings vehicles -- a trend which has increased at a significant rate over the recession.

When asked about current value of retirement savings available, 48% reported having less than $50,000 in savings, with 16% of those reporting no savings at all.

With many older workers currently facing extended unemployment, 63% of respondents said that, based on what they have experienced or observed, older workers face age discrimination in the workplace.

20% of people over the age of 45 reported problems paying their medical bills in the last six months. The percentages were significantly higher for Hispanics (29%) and African-Americans (33%).