While millions of Americans have experienced hard times during the current economic recession, the impact on African Americans has been devastating. Circumstances have been particularly difficult for those over the age of 45 and their families.
A recent AARP survey finds that, compared to the general population, nearly twice as many African Americans age 45+ have lost a job (18 percent vs. 10 percent).
Over the last 12 months, a third (33 percent) had problems paying rent or mortgage; 44 percent had problems paying for essential items, such as food and utilities; and almost one in four (23 percent) lost their employer-sponsored health insurance.
Faced with the extraordinary impact of this economy, African Americans age 45+ are more likely to turn to family or the community for assistance, and are more likely to help family members and friends cope with financial hardships.
Eighteen percent had a child move in for financial reasons, and 44 percent helped a child pay bills or expenses. Almost one in five (18 percent) helped a parent pay for basic necessities. African Americans age 45+ were more than twice as likely as all Americans in that age bracket 45+ to seek financial assistance from family, friends, charities and churches (28 percent vs. 13 percent).
Many have been forced to make increasingly difficult decisions in an attempt to cope with the economic downturn —— decisions that may have serious long-term consequences. A third (34 percent) stopped putting money into a 401(k), IRA or other retirement account, and a quarter (26 percent) prematurely withdrew funds from their retirement "nest eggs" to pay for living expenses, including mortgage or rent, health care, education expenses, and for other reasons. More than three in (31 percent) have cut back on their medications, and 28 percent have carried a higher balance on their credit cards during the past 12 months.
Improve Your Situation
While some African Americans may have the luxury of friends and family to help, others may not be so fortunate. Here are a few potential strategies that can help you improve your financial situation and turn things around.
- Use benefit programs. Explore what public and private benefit programs exist that can help you weather this financial storm. You may qualify for benefits to help to pay for food, utilities, health care, and medicine with Benefits QuickLINK, our easy online screening tool.
- Cut costs. Look for ways to cut costs and you could save hundreds of dollars a month. Cut your spending and stick to a budget before tapping into your retirement savings.
- Seek financial information. Investigate what additional resourcesmay be available. Use these resources to build financial security. While a number of websites offer good financial information, many African Americans age 45+ are not taking advantage of them. According to the AARP survey, only one in 10 (11 percent) consulted online resources about financial planning.
- Enhance job skills Learn more about AARP job fairs, the National Employer Team, and the AARP Foundation WorkSearch program. African Americans studied were more likely than the general population to enhance job skills and career training. Thirteen percent have enrolled in training to qualify for different types of job, and 18 percent have attended job fairs to enhance their career orjob search efforts.
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