John Rodwick cuts corners so he has money to spend on his seven grandchildren and cruise around the Rocky Mountains with his wife, Jean, in their blue-trimmed Roadtrek motor home.
My wife and I love to travel, so that is our one big expense, but we are very, very conservative, cooking and sleeping in their 19-foot vehicle, said the 72-year-old former business professor. With the value of their three-bedroom home plunging 30 percent in the past six years, the Rodwicks have become very cost conscious, he said.
Federal Reserve officials say theyre concerned that retirees like the Rodwicks are blunting the impact of record easing aimed at creating jobs. The reason: Older people are more likely to forgo purchases of houses, cars and other big-ticket items that the Fed is trying to encourage with near-zero interest rates. And their numbers are growing, making the Feds task ever harder.
Spending decisions of the older age cohorts are less likely to be easily stimulated by monetary policy, William C. Dudley, president of the Federal Reserve Bank of New York, said in a speech on Oct. 15, helping to explain why the economic recovery has been weaker than expected.
Each day, some 10,000 of the 78 million Americans born between 1946 and 1964 — the so-called baby boomers — turn 65. The share of the population in that age group will swell to 18 percent by 2030 from 13 percent last year, according to the Pew Research Center in Washington.
Impact Magnified
