Decades of saving and hard work as a teacher earned Beverly Welsh what she thought would be a comfortable retirement.
She bought a townhouse in Las Vegas to be near her mother, but the longtime South Pasadena resident continued to spend time in her beloved Southern California. She spoiled her five cats. She took acting classes, landing small parts in a few low-budget films.
Then the bottom fell out of the real estate market and stocks cratered, wiping out a third of her $750,000 net worth over the last two years. Tight on cash, the 76-year-old retiree says she may seek work as a substitute teacher to supplement her dwindling investment income.
"It's unbelievable how quickly it happened," Welsh said. "I'm not sleeping well."
U.S. economic turmoil is damaging the nest eggs of seniors such as Welsh. Swift declines in the value of their biggest holdings -- real estate, stocks and mutual funds -- have sent many of them scrambling to adjust to the greatest shock the U.S. financial system has experienced since the Depression.
There's no doubt seniors are much better off today than they were in the 1930s. Most Americans older than 65 are covered by Social Security and Medicare. And they are the nation's wealthiest citizens as measured by their net worth, according to the Census Bureau. Still, the recent hits have been particularly tough on retirees, many of whom rely on investment income and, increasingly, home equity to meet current expenses. And time isn't on their side: They don't have decades to wait for the markets to rebound, unlike younger workers.
Shrinking investment returns are forcing many pensioners to trim household expenses. Others are postponing retirement or getting jobs to make ends meet. Last month, 16.4% of Americans 65 or over were in the workforce, according to the Bureau of Labor Statistics. That's the highest percentage in 38 years.
A soft housing market has some retirees stuck in properties they had counted on selling -- delaying plans of moving to warmer climates or areas with a lower cost of living. For others it's just the opposite: They're facing eviction from homes they never dreamed of leaving.
Three refinancings have left Dale Campbell and his wife owing $485,000 -- more than their Whittier home is worth. The interest rate on their mortgage is due to reset in November, and the payments will more than double to $3,800 a month. The 77-year-old retired truck driver figures it's just a matter of time before the bank sends the couple packing.
