The effects of the current economic slowdown are going beyond the grocery store and the gas pump. The inability to make ends meet is forcing some Boomers to cut back on saving in addition to withdrawing money from their 401(k) early, which means delaying retirement.

A study titled The Economic Slowdown’s Impact on Middle-Aged and Older Americans, conducted by Woelfel Research Inc. on behalf of AARP, showed that 27% of people between the ages of 45 to 64 said they had postponed retirement plans because of the recent economic downturn.

The telephone poll of 1,002 people also revealed that 27% of respondents 45 to 54 years old were postponing paying bills, and 17% were cutting back on medications because of current economic conditions.

The study uncovered even more indications that the economy was taking a toll on the finances of people between the ages of 55 and 64:

• 53% said they found it more difficult to pay for utilities
• 50% said the value of their 401(k) plan had dropped in the previous year
• 36% said the value of their home had decreased
• 31% who had lost money in stocks said the losses caused them to change to less volatile investments
• 23% who had lost money in stocks said the loss prompted them to postpone retirement

There was a general feeling from the data collected that market fluctuations and the uncertain economy have made Baby Boomers more nervous. Many of the Boomers surveyed expressed concern about seeing their retirement savings becoming depleted, and as a result, they were considering taking another job or working longer before retiring.

The research indicated that at this critical juncture in their lives, Boomers should be relying on financial advisers who can help them maneuver through this difficult economy. Advisers can provide their Boomer clients with the type of product or service that best suits their needs. However, no matter what financial vehicle they choose, ultimately, the best course of action is to maintain a consistent pattern of saving.

Boomers shouldn’t be reducing their 401(k) contributions. Many respondents indicated that they’ve tried to make the maximum contribution to their 401(k) every year, but their expenses are up, and they need more money each month, so they get the needed cash by not making contributions to their retirement plan. However, not making these contribution has a far more adverse effect on their retirement than most Boomers realize, because they have fewer working years left in which to make up those lost savings.