What’s in your Wallet? Measuring economic stress on older Americans
One of the biggest challenges people face as they consider retirement isn’t just how long they will live but how financially secure they will be. There are good reasons to be concerned. Because of rising rents, the costs of health care and other costs of living, many older adults enter their retirement years facing the difficulty of making a balanced household budget, especially people who live alone. A large portion of every state’s independent older adults lack incomes that would allow them to escape the threat of poverty, to remain independent and to age in their own homes.
A recent report prepared by the Gerontology Institute at UMASS “Insecurity in the States 2019” includes the following facts:
- National averages suggest 50 percent of older adults living alone and 23 percent of elder couples have annual incomes below the Elder Index.
- Nationwide, 32 percent of single elders and 18 percent of elder couples fall into the gap between the Federal Poverty Level and the income required for realistic economic security.
- At least 40 percent of adults age 65 or older in every state are at risk of being unable to afford basic needs and age in their own homes.
More than half of older adults living below the Elder Index rely on Social Security for at least 90 percent of their incomes. Because of the gender differences in earned income, women fare poorly:
- Women usually live longer than men but tend to save less for retirement.
- Women make 82 cents to every dollar a man earns.
- Women are more likely to work part-time jobs without access to workplace savings plans.
- Women are still the primary caregivers, often leaving jobs to care for family members.
- Older women rely on Social Security; for many it is their only source of income.
(source: WISER)
The Elder Index was developed by the Gerontology Institute at the University of Mass. Boston with Wider Opportunities for Women (WOW), and is currently maintained through a partnership between the Gerontology Institute and NCOA. The Elder Index is a measure of the income that older adults need to meet their basic needs and age in place. It’s a free online tool that allows users to calculate the realistic cost of living for older adults in every county and state in the U.S. The report matches that information with income data to calculate the percentage of older adults whose incomes fall short of their costs and ranks the states on that basis. Another report focused on Massachusetts provides detailed elder economic insecurity data on the county level. The elder index calculated a realistic national average annual cost of living of $25,416 for renting elder singles and $36,204 for older couples who rent. The 2019 federal poverty guidelines for the 48 contiguous states are $12,490 per year for singles and $16,910 annually for couples.
Massachusetts comes up as the state where the level of economic insecurity is the highest. “The elder index provides an important reality check – a realistic measure of the actual cost of a no-frills lifestyle for elders living independently.”
Why are these facts important to everyone? As we face threats to the benefits available to older people, such as the recent reductions for those relying on Food Stamps and suggested cuts to Medicare, it’s crucial to actively engage with local, state and congressional officials to advocate for keeping supports in place for everyone. It’s especially urgent that women become more proactive in protecting their financial resources and also advocate for increasing the incomes of women across all age groups.
To learn more you can visit: www.elderindex.org.