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Boomers cut back spending, saving

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The Associated Press reports that 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. The wire service quotes a survey released Tuesday by the AARP that found nearly four in 10 said they had helped a child pay bills or expenses. Among other findings:

  • One-third of boomer retirees said they’d helped their children pay bills. Eight percent said they’d helped a parent pay bills or expenses.
  • 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.
  • 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.

According to the AP, 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.