Will youngest boomers go broke?

The economic woes that are forcing homeowners into foreclosure, choking spending on nondiscretionary goods and driving up credit card bills may claim another group of victims in the coming years: broke baby boomers.

Consumers 45 years and older are raiding or compromising their 401(k) accounts, shirking monthly payments and skipping regular medications and doctor visits at an alarming rate, according to senior advocacy group AARP.

As many as 25% of Americans 45 to 64 said they are taking these steps to stay financially afloat, the AARP found in a recent study. That will put them at a decided disadvantage when retirement rolls around, particularly if they have subverted their health, and may lead to putting that retirement on hold.

At the same time, Standard & Poor’s reports that the average American household savings rate remains at 0%, making it “more difficult for older Americans to finance their retirement.”

“This is a horrific scenario,” said Tom Nelson, AARP’s chief operating officer. “People are feeling this pinch in the short term . . . but the long-term consequences that are facing these individuals and our economy for years, if not decades, are frightening.”

The AARP survey included people 65 and older but found that those who were having the most difficulty adjusting to declining home values and higher prices for food and energy were 45 to 54, followed by those 55 to 64.

By MarketWatch