For sale: With the outlook expected to remain bleak, rental incomes could fall further. *AFP photo
For sale: With the outlook expected to remain bleak, rental incomes could fall further. *AFP photo

Economic events in Europe have been dominating business discussions, and the consensus is that collectively the European economies will shrink in 2012.

If this happens it is expected that it will reduce economic activity throughout the world because the 450 million people living in Europe represent a large market for the exports of the US, China and Japan.

This will then provide another headwind for the US economy and will lead to reduced economic activity which will then be felt in Bermuda, as the US is our largest trading partner.

This may lead to reduced economic activity in Bermuda which, amongst other things, would reduce employment levels, rental income and Government revenues.

Seniors will be affected if they receive rental income as this will reduce in 2012.

Jobs will be less plentiful and so seeking part-time employment to supplement retirement income will be harder and the pay lower than it otherwise would have been.

Savings

Lower revenues for the Government will reduce the amount of money the Government has to spend, and it is to be expected that a part of any reductions would impact on the services provided to seniors and the fees levied for these services.

On the other hand, those seniors who pay rent should find the cost static or lower and the general level of prices should be lower than in 2011.

One major impact on seniors of the global financial crisis has been the reduction of interest paid on deposits and other forms of savings.

In order to save the financial system in the US, the Federal Reserve has reduced both short and medium-term interest rates to artificially low rates in order to prop up the banks and keep millions of American households from defaulting on their mortgages.

This has reduced the incomes of seniors and there is no sign of any respite in the next few years.

Japan started this policy more than 20 years ago and has not found a way out of this trap.

What actions can you take now to prepare for these unpleasant outcomes?

There are no all encompassing actions that will insulate you from this harsh economic climate.

Instead, it will be necessary to fall back on the tried and tested remedies from our ancestors.

We will all need support and the best place to start is within the family.

Consider if there are ways to consolidate living accommodation to save money.

Can an apartment be renovated or amended so that one part of the family can move in?

What about the younger family members, what should they be thinking about?

In education and training the emphasis has to be on courses and qualifications that are needed in the economy of today and tomorrow, and less on those jobs that were plentiful a generation ago.

On a daily basis the emphasis is on keeping a job even if it is not one that you wish to follow in the medium term.

It is easier to look for a better job and make training plans when you have a job.

Peter Everson is an economist and a member of Age Concern Bermuda’s Campaign for Successful Ageing. If you would like to comment on this article or learn more about the Campaign for Successful Ageing, e-mail info@ageconcern.bm.