The Beatles' 1970 ballad The Long and Winding Road may be an apt anthem for Americans 55 and older whose dream of a financially secure and comfortable retirement is now in jeopardy of being deferred, and in some cases, will need to be downgraded.
For many 55 and older adults, the road to retirement today is anything but a short financial walk in the park, now three years after the 2008 recession.
And findings from a recent AARP Public Policy Institute survey entitled "Recovering From the Great Recession: Long Struggle Ahead for Americans," suggests that retirement for the next generation of Americans will likely be a financial juggling act
According to AARP's survey, the recession and its aftermath have not been easy on middle-aged and older Americans, and the future is a big question mark for many of them. Recovery for persons most adversely affected (the long-term unemployed, or who have filed for bankruptcy) will likely be long and slow, and some may never make it back to where they were before the recession.
"These people have been through quite a lot in the past 10 to 12 years," said Sarah Rix, senior strategic policy advisor for AARP's Public Policy Institute Economics Team and co-author of the research report. "They are feeling rather insecure about their financial situation."
The AARP Public Policy Institute conducted an online survey in October 2010 of more than 5,000 Americans aged 50 and over who had been in the labor force at some point during the previous three years.
AARP's survey covered 5,027 men and women who had worked for pay, including those who worked for themselves or in their own businesses, who had tried to find a job in the three years prior to being interviewed -- that is, who had been in the labor force.
And three years after the 2008 recession, 50-plus Americans may be facing a veritable perfect economic storm comprised of a weak economy, spiraling out-of-pocket health care costs, faltering home values, meager savings and anticipated retirement revenue streams that may no longer be flowing when they finally get there.
And this senior group is clearly worried about their retirement prospects, according to the findings of AARP's survey, and nearly half surveyed felt that they would live less financially comfortable in retirement compared to their parents.
"Approximately 46 percent said they expect to be less economically secure," Rix said. "Only 18 percent felt that they would be more secure."
On the cusp of their supposed "golden years," 55-plus adults now face higher unemployment, loss of their income and savings, and lowering of their home values.
One out of six, or 17 percent, 55-plus adults reported they're unemployed. Roughly one third say their home values declined in the three years prior to 2010, while nearly 20 percent say they've fallen behind on their credit card payments, or accumulated more credit card debt.
One in seven queried report they've had trouble paying their rent or mortgage, while one in eight, or 12.5 percent, report having lost their health insurance.
Some queried say they're saving less, or have stopped saving altogether; while others say they've had to draw upon their savings to pay their bills.
Such bleak economic conditions, not surprisingly, have dimmed these seniors retirement prospects. Four out of ten seniors surveyed now believe their standard of living during retirement will be worse than their parents.
"The problem with a lot of people in their 50s, is they're getting pretty well worked over financially and they're a pretty pessimistic group,'' said Jay Butler, associate professor of real estate at the W.P. Carey School of Business at Arizona State University.
That pessimism may jump up a notch if anticipated government subsidies counted on by retirees start shrinking and eventually go away.
"We used to talk about changing Social Security and Medicare in 10 years from now; now they're talking about changing it now," Butler said.
In the three years since 2008, Americans aged 55-plus saw their unemployment rate hit its highest level in 60 years. The average duration of unemployment rose for older jobseekers, as did the percentage of them who were among the long-term unemployed. Many gave up the job search and left the labor force.
Nearly 30 percent of the survey sample said that they were either unemployed or looking for work, or were employed but had been involuntarily unemployed in the previous three years. Another 13.4 percent said they were out of the labor force but reported having been in it at some time during the previous three years.
Seven out of 10 were employed at the time of the survey. A slim majority -- 57.2 percent -- not only had jobs at the time of the survey but had avoided any involuntary unemployment during the preceding three years.
"One of the fears that a lot people have in this 55-65 age group is that yes, I am going to have to work longer, but 'I may eventually be forced out,"' Jay said. "They may not have the skills; they earn more than younger people; or simply, their company no longer needs them."
Besides lean job prospects, about one third of Americans 50 and over have since 2008 seen their homes decline substantially in value. At the same time, roughly 20 percent of those questioned say they have fallen behind on credit card payments or accumulated more credit card debt.
The 55 plus group are also finding it harder to make ends meet over the previous three years. Roughly 60 percent of those surveyed say household expenses have increased while their household income has shrunk.
Jay said there's also a big concern that a segment of adults in this age group may have used up their IRAs and other retirement plans to retain their homes.
There is, however, a glimmer of hope for the 55 and over bracket, according AARP's survey. This group is starting to save more and working more and are acknowledging that they may have to forestall their retirement for a couple of years down the road.
Despite the recession, the survey indicates that many older Americans did manage to keep saving during the downturn, and some even started to save. An estimated 44 percent of the study's population was currently saving for retirement and 78 percent of those not currently saving had done so in the past.
Those 55 plus adults queried acknowledged that their planned retirement will likely need to be a deferred a bit.
Rix said roughly a third of the plus 55 respondents said they had decided to defer their retirement date. About 25 percent said it was likely that a spouse would need to work part time.
Jay says it's the next segment of Baby Boomers waiting in the wings that should be getting prepared for leaner retirement times.
"We hope those who are under 50 and 55 see the writing that is on the wall and start doing something now," Jay said.