As many Americans retirement wealth has fallen during the last two years, some older residents here have curbed plans theyd made for their sunset years.
Retirement-industry and elder-service experts here say the sour investment market hasnt affected day-to-day spending noticeably among Spokane retirees, but many older residents are traveling less, keeping long-held property, and forgoing lengthy winter vacations in Arizona and Florida.
There are fewer people wanting to sell their homes and move into retirement communities, says John Renner, marketing director at Fairwinds Retirement Community in North Spokane, which is owned by Bellevue, Wash.-based Leisure Care Inc. Theyre sticking with the status quo. Theyre huddling in and not taking any big vacations.
The observations reflect the results from a national survey released last month by the American Association of Retired Persons, which found that 67 percent of people between the ages 50 and 70 who had lost investment money said that theyve curtailed their lifestyles because of their losses.
Retirement industry representatives here speculate that the Sept. 11 terrorist attacks and the world conflicts that have followed are worrying older residents, especially those who remember the Great Depression and World War II.
I think a lot of people are nervous about the economy, says Jenny McEffin, program administrator for Elder Services, a nonprofit Spokane Mental Health program. There are people still around who remember the Depression or have heard stories. Its hard for older people to adjust to changes, and change happens a lot these days.
Although McEffin mainly works with low-income residents who have few discretionary funds, if any at all, she has seen an increase in general inquiry calls made to the agency over the last two years, she says. Callers often ask about energy- and drug-assistance programs and in-home care options, she says.
Renner agrees that the life experiences older residents endured during the 1930s and 1940s are playing a role in their spending decisions.
They take these thingsthe stock market and the threat of wara lot more seriously than maybe your average person does, he says.
Leisure Care offers travel services, called Travel by Leisure Care, at its retirement facilities, and Renner says fewer residents are using that service to book overseas travel than in the past. Many residents go on day trips to shopping centers and longer outings, such as winery tours through the Columbia River Gorge, which the retirement community offers. The number of residents taking part in those activities closer to home hasnt dropped, although costs associated with the outings are absorbed in fees that the residents already pay, he says.
The AARP survey, which involved about 1,000 telephone interviews conducted early last month, found that 77 percent of respondents had lost money in the stock market between the beginning of 2001 and near the end of 2002. Of those who had lost money but hadnt retired yet, 21 percent had postponed retirement, and 10 percent of those whod gone ahead and retired had already returned to work or planned to do so because of their losses, the survey says. Among all respondents who lost money, 59 percent said theyre budgeting money more carefully now, and 30 percent had postponed making a major purchase.
A separate study, published last spring by the Economic Policy Institute, a nonprofit, nonpartisan think tank based in Washington, D.C., says pre-retirement households with combined retirement wealth of $1 million or less saw that wealth shrink by between 11 percent and 33 percent in real dollars since 1983.
Steve Wuitschick, president and CEO of Rockwood Retirement Communities, of Spokane, says he knows residents in their 80s or older who had invested all of their savings in the stock market and had suffered losses of 30 percent to 40 percent.
Residents in Rockwoods two retirement complexes here, Rockwood South and Rockwood at Hawthorne, still are traveling throughout the U.S. on short trips to visit their families, but extended winter vacations to the Sun Belt have waned, he says. He says he hears of pre-retirees planning to work longer than theyd expected to, but doesnt see his residents making drastic changes in their day-to-day lifestyles.
People are holding onto their cars, unless getting a new car is cheaper for them, he says.
Renner says that often the decision to sell ones family home is being put on hold. Fairwinds went through a slump in business a year ago, when calls of interest from potential residents were scarce, he says. Mary Munoz, director of the Wisconsin-based senior-living finance company Ziegler Capital Markets Group, says she saw similar trends nationwide last year.
My clients couldnt get 70 percent of their units pre-sold before building retirement communities, which is a requirement her company sets before committing to finance such projects, she says. People were staying in their old homes, holding back. It wasnt just because of the stock market. There was a fear that followed the World Trade Center attacks.
Business at Fairwinds began to recover last summer, Renner says. With 120 living units occupied, Fairwinds complex is at 80 percent capacity currently, and Rockwood South, which has 550 living units in all, is building 10 more.
Renner says he expects business to continue to improve.
As long as the market stabilizes I think people will relax, loosen up again, and the activity will increase, he says. I feel that way because were right at a turn of the generation of retirees. Younger retirees are more active, more liberal, more interested in change than the current generation of retirees, Renner contends.
While older retirees might be holding onto memories of war and the Great Depression, younger retirees have been through the stock market stuff and theyre going to say, Were going to keep going, Renner predicts.
Thats not to say todays retirees arent active, he says. An attempt to contact senior travel escorts Glen and Clararose Childs, at Corbin Tours, which coordinates tours for retirees and other travelers, supports Renners point. The couple couldnt be reached. They were busy leading 22 seniors on a tour to Mazatlan, Mexico.
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