<p>The housing market collapse has wiped out some $3 trillion in home equity that once formed the bulk of most boomers’ life savings. The incineration of another $11 trillion in stock market wealth has cut a wide swath through the individually managed accounts that have largely replaced the employer-managed pensions that supported their parents generation in retirement.</p>
<p>Some 3.8 million workers 45 or older were unemployed as of February up from 2 million when the recession began 15 months ago, according to the Bureau of Labor Statistics. Many are now burning through what remains of their savings and raiding retirement accounts to pay college tuition or to meet basic household expenses…</p>
<p>In past economic downturns, many 50-something workers faced a decision about accepting early retirement, complete with a financial package designed to tide them over to their next job or top off a retirement account. With corporate profits tanking, many employers have simply dispensed with the niceties of severance pay.</p>
<p>They gave me no help. Nothing. Just Have a nice day, said Joanne, 51, who asked that we use only her first name. It was a horrible way to treat people. It was unbelievable.</p>
<p>Joanne said she suspected her job as a technology consultant was at risk when she was asked to train someone else to do the work who was half my age, with half my qualifications. The clients will suffer, but thats not my problem.…</p>
<p>White-collar boomers, including those with advanced degrees, top credentials and decades of carefully groomed resumes, are confronting a job market theyve never seen before. …</p>
<p>As the number of job seekers has risen, the number of openings continues to shrink down some 50 percent from when the recession began in December 2007. That means nearly five people are competing for each opening, up sharply from a ratio of less than 2-to-1 little more than a year ago."…
[Boomers</a> face stark choices in bleak economy - Reinventing America- msnbc.com](<a href=“http://www.msnbc.msn.com/id/29535417/]Boomers”>http://www.msnbc.msn.com/id/29535417/)</p>
<p>It’s been difficult for many of us here, and I am talking about the lucky ones. We did not buy our house as an investment but were heartened and emboldened by how much of a sellers’ market it was here in the NY area. We felt confident that this time around we would not have to worry about getting rid of this house, which was a concern with all previous houses we owned since we lived in markets where homes just did not move quickly.</p>
<p>Also as our house appreciated over time, we were able to justify spending more than we should have on our kids’ education as the home equity was a savings plan, source of loans, financial asset for us. </p>
<p>All of that has tumbled down recently. We are stuck pretty much with a mortgage payment that is higher than we want on a house bigger than we need in a better school district than we need. And there is no assurance at all that there is any equity in this house at all. The flexibility we thought we had upon our eventual retirement that having a marketable house with a nice value would have given us. The one advantage of having a house in a high housing market area is that you can relocate nearly anywhere upon selling such a house since you will find housing most likely to be less most anwhere else.</p>
<p>CPT, I feel your pain. I think we have to hope that the desirability of a house in a good area with good schools will give the best value and potential for appreciation when things appreciate. Of course we never know when that will be exactly. </p>
<p>Around here the houses in the neighborhoods that have good schools sell much more quickly and for a premium over adjoining town with less acclaimed schools, when they sell. The lesser acclaimed districts may not even be actually worse and often have lower taxes, but they do not get the same value. If you are in an area with a “good address”, it will ultimately provide value over the cheaper area/quality. </p>
<p>A few years ago, I knew a couple of ladies who were retiring or should have retired. Kids were grown,house appreciated a ton, etc. H and I said to move somewhere cheaper. One did, one not. I am not sure which one is better off. The one who moved probably surely lost money on the new place. The one who stayed, lost also, but that was just a phantom profit. She still can sell at a lot more than she paid for it years ago. That I think, is the key in real estate, holding long term. Maybe some people can jump around and sell for profit over profit, but I personally have found that not to be the case. I have sold for a loss twice in the downturn of the early 90’s on things bought in the 80’s.</p>
<p>In Florida, we had an incredible run up for the past few years and now values seem to be dropping almost as quickly. For some stupid reason, I registered with Zillow and can’t seem to unregister. Every month I get e-mail alerts saying things like “Your address went down $19,000 this month.” Good thing we have no plans to sell anytime soon.</p>
<p>Joanne, welcome to the real world. There are millions of people who have been losing their jobs in the way you described <em>even when the economy was booming</em>. And what’s a pension?</p>
<p>I’ve actually been feeling pretty good lately about spending so much of my money on trips and (some extravagant) things and toys over the years, rather than saving it all. My savings have lost 30% of their value, but I will forever have 100% of those memories and experiences and even most of the “stuff” I spent my money on. The economy can’t take that away from me.</p>
<p>Bay, the truck in my garage held much more of its value than the stock I sold to pay for it 10 years ago. Had I held on to that stock, I would have lost 99.9%.</p>
<p>That’s exactly the attitude we need to get this economy going! I am sure we will get much more enjoyment out of that gas grill we just bought than having an extra $500 in the bank, (And I will enjoy that one as much as the $3000 grill we didnt buy!!) I even told my wife, in one year we won’t be saying, “gee, this grill is too big”… so we got a slight upgrade over the cheapest smallest one. </p>
<p>So cash in all those nearly worthless pieces of paper and start buying more STUFF!!</p>
<p>I definitely feel jinxed. When I left “big tech company” stock options were under water. Friend had made millions on them at the company earlier but not my luck. Never intended to stay in the house. Stayed so last one could come home freshman year, now selling is not in the future and should have done some different things with the house financing. Intended to retire with DH, but old 401(k)s have fallen so far that that is not in the future now,either. Hope I can retire before it is too late to enjoy traveling with him (he’s older than me). </p>
<p>But, I have consulting and teaching work that provides a good income. He has his Fed retirement so health is covered. We can afford the house and although value dropped, it is not upside down. The kids are all managing. When everything is weighed, we are dong Ok. Not what we expected, but OK. So I am thankful. </p>
<p>And we like to travel, eat out, visit the kids. We are spending for experiences not things. And we will help boost that ol’ economy.</p>