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Surviving Recession

Older workers are barely making ends meet in an economy with few jobs

Barbara Harvey with her dogs - recession survivors

— Photo by Wayne Lawrence/INSTITUTE

It's been three years since Barbara Harvey turned in for the night in her Honda SUV, wedged between her golden retrievers and a pile of blankets in a barren parking lot in Santa Barbara, Calif. She'd lost her income, then her home, in the real estate crash that plunged the nation into a deep recession.

Harvey, now 70, no longer lives in her vehicle. She shares a tiny apartment, and a bed, with her 22-year-old daughter, Victoria. Her work as a notary public for the real estate industry is slowly returning, providing a fairly steady paycheck for the first time in years.

See also: Retirement plagued by bad health and money woes.

"It's helped enormously to have some income coming in," says Harvey, whose dogs still sleep in her Honda each night. "I'm being careful with whatever cash I have."

For Harvey and tens of thousands of Americans nearing retirement, the recession that walloped the nation in December 2007 has permanently altered their lives. Many lost their jobs, their savings, their homes or a chunk of their net worth that they may never regain.

As December marks the fourth anniversary of the downturn, the AARP Bulletin caught up with a dozen workers it had interviewed over the years to find out how they've managed. Several, including Harvey, Steve Stanislowsky and Veronica McGill, are doing marginally better but continue to struggle.

Some wonder if they will ever work again. Others worry they'll never again live adequately, let alone comfortably, in an economy with few jobs and savings that earn almost nothing in interest. (To see  how other interviewees are faring, go to aarp.org/recessionsurvivors.)

"This is still a story of survival after the fact," says Sara Rix, senior strategic policy adviser at AARP. "For some people, their nest egg was tied up in their home. Now, they may not have the option to move to an area more attractive for retirement or where jobs are more plentiful because the value of their homes has not appreciated.

"Some didn't have adequate savings or dipped into investments that were earmarked for retirement," she says. "Some took loans from their 401(k) plans or took their Social Security benefits early. They did all the things they shouldn't have had to do on the threshold of retirement."

Since the downturn hit, the unemployment rate for older adults has more than doubled (from 3.2 percent in December 2007 to 7 percent this October). Currently, more than 2 million people 55-plus are out of work. But it is the length of time they have stayed that way (if they didn't just give up) that is astonishing — 53 weeks as of October.

Those who finally landed a job were among the most fortunate.

Barbara Harvey lived in her car with her dogs in 2008 - recession survivors

Homeless at 68, Barbara Harvey and her dogs wake up after sleeping in her SUV. — Photo by Ron Haviv/VII

Barbara

Living in her car was not what Barbara Harvey had in mind for her mid-60s. But when the financial meltdown turned her real estate business upside down, Harvey's income vanished. She and her two dogs, Phoebe and Ranger, found themselves in the back of her SUV each night in a women-only parking lot designated for the homeless in Santa Barbara, Calif. She took showers at a local gym and ate in her car. Over the last two years, Harvey has moved in and out of rented homes. In August, she settled in with her daughter in a tiny apartment so small that the dogs need to stay in her car at night. "I make sure I take them to the park to run around off-leash," she says. Slowly, she's rebuilding her client base as a notary public and generating income. Thanks to her modest Social Security benefit, she's also able to stash away some savings. "I am hoping I can live on my own soon," she says, "in a home with a garden for me and the dogs."

Next: Steve Stanislowsky, hoped to live off Social Security after losing his job. >>

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