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Seniors face less time to recover from recession
As the nation slowly emerges from the economic downturn, some seniors are finding financial recovery difficult. Recent estimates from the American Community Survey show 8.3 million seniors living at or near the poverty line.
In the final part of our Recovery series, KJZZ’s Nick Blumberg reports that for older Americans, having less time to rebuild net worth can require a shift in thinking.
Bob Cooper has had a lot of different careers in his life. “I’ve owned a contracting business, a dating service, a school, and a map publishing business," Cooper said. But most recently, he painted houses.
Five years ago, he decided to retire. “I think I created the great recession, because starting at that point, I watched my asset values disappear."
Cooper owns two houses side by side in Scottsdale: classic, low-slung Arizona homes with orange trees all over the property. His plan was to sell one of the houses when he turned 70 and live in the other one. He’s 70 now, and that’s not feasible.
“The recession caused, I would say, 50 percent of the value [to be lost]," Cooper said, "which meant that even though I had a great deal of equity, and I still have a little bit of equity, most of my resources disappeared.”
Cooper’s not destitute, he’s just nowhere near where he thought he’d be. He’s taken a few odd jobs and rented out his second house. After some dark times, he’s reached a place where he can face his 70s with a lot less money than he expected.
“If you’re not living your life around what your net worth is, and you have your health, you’ve got a lot of positive options," Cooper said.
But for some seniors, the downturn lead not just to a change in thinking, but a change in scenery. Mary Hanson is a native Arizonan who's currently living in Chiang Mai, Thailand.
Hanson, who’s 61, and her husband Tom, who’s 64, moved there in November. He’s retired and collecting Social Security. She had to retire early for health reasons and is a few months away from eligibility.
Their parents were products of the Great Depression, so the Hansons weren’t invested in stocks; just securities, bonds, fixed annuities. Still, they watched their return drop to 1 or 2 percent and started to worry about running out of money. So, they moved.
“I don’t want to end up on welfare. I don’t want to end up in some snakepit nursing home. I want to be able to pay my way from cradle to grave, if you will," Hanson said.
It’s a pretty drastic move, but not a permanent one. They’re renting out the house they own in Arizona -- it lost $120,000 in value. But Hanson says the cheap cost of living in Thailand allows them to build up their savings. Their monthly cost of living is between $800 and $1,000. They save on energy, food, internet and TV, and health care.
“You can talk about 401(k)s all day long. You can talk about Social Security benefits all day long. What’s someone’s number one asset? Their health," Greg Lane said. He runs a financial planning company, helping seniors figure out their future.
Lane says older people who were hit hard by the recession are running out of time to recover, but the best thing they can do is to lead a healthy lifestyle and be proactive. “It’s never too late to plan, I don’t care whether you’re 50, 60, 70, or 80," Lane said.
For some, that plan might take them unexpected places; say, Thailand, 8,300 miles away from home. Mary Hanson belongs to an expats club that estimates there are 20,000 foreigners living in Chiang Mai, and that as many as half of them are American. Even with a small community, Hanson still misses home -- but a big move like hers is different than it would have been in another era.
“My great-grandmother came over from Ireland. I think about her leaving, and the last thing that she saw being the Cliffs of Moher," Hanson said. "She had to know as she was leaving in that ship, that she would never see Ireland again. For me, I know that if push came to shove, I’d be able to get on a plane and be home in a day.”
And if all goes according to plan, Mary and Tom Hanson will be home for good in three to five years.