On paper, consumer price inflation has been tame, personal incomes are modestly higher, and measures of senior poverty are reassuringly low. But in the real world, prices for many consumer items are much higher, especially in poorer neighborhoods without Wal-Marts and other price-conscious retailers. Incomes for many seniors are not rising. And many older households are experiencing what can best be called financial exhaustion.
Many older consumers have scrimped during their retirement years to make ends meet. While they make enough money to avoid poverty, they don't have much of a cushion. Now, with nest eggs depleted and home values still depressed, they are running out of painless financial sacrifices.
ClearPoint Credit Counseling Solutions operates all over the United States and is one of the nation's largest nonprofit counseling agencies. Based on summaries of its counseling workload, rising numbers of seniors are running out of money, and the trend is getting worse.
In 2007, less than 5% of the consumers using ClearPoint's credit counseling services were at least 65 years old. At the beginning of this year, the organization reports, more than 13% of its clients were seniors.
Further, ClearPoint says, the dominant reason seniors sought counseling in 2007 was to get help with their poor money management and excessive spending. Today, however, the top problem bringing them in for counseling is reduced income.
If the economic recovery is moving ahead, it's doing so very slowly for many older consumers. "Things are starting to get better, but they're not getting there very fast," says Patrick Owens, a ClearPoint counselor in Richmond, Va. "Right now, we seem to see the same situations (with seniors) with rising credit card debts and falling values of their homes.
"They're taking on more unsecured debt," Owens explains. "They know they don't want to rely on their credit cards" but don't see an alternative. "Many of them are not aware of other forms of assistance" that credit counseling agencies can help provide, including help paying utility and medical bills.
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