There are a lot of great things about getting older (goodbye, caring so much what other people think!), but we’re not going to sugarcoat it. There are a lot of things to worry about, as well. Your health might be top of your list, but how about your finances? How sure are you that you have enough to keep you secure through your retirement? The sad reality is that many seniors will not have enough money to last them for their whole lives, so many will age into poverty, and find it very difficult to get out of that situation. And we should all care about this issue, not just because it’s affecting our loved ones, friends, and neighbors, but because none of us are immune, no matter how well we think we’ve planned. So what’s going on, and can anything be done?
How Big Is the Problem?
If you read government data on older adults and poverty, you might be slightly distressed by the numbers, but you might not come away thinking that the financial distress of seniors is a dire problem in the U.S. But you’d be wrong. So what do the official numbers say? Well, according to the Congressional Research Service:
“The poverty rate for the aged population historically was higher than the rates for younger groups, but the aged have experienced lower poverty rates than children under age 18 since 1974 and lower rates than adults aged 18-64 since the early 1990s. In 2019, the 8.9% poverty rate among individuals aged 65 and older was lower than the 9.4% poverty rate among adults aged 18-64 and the 14.4% poverty rate among children under 18 years old.”
They point out that there are more older people living in poverty now than decades ago, but that they make up a smaller percentage of the population, since we have so many more people in our country now, and because older adults are living longer. That means that, as of 2019 (and not taking into account the financial stress that the pandemic has put on a lot of people), nearly 5 million adults over 65 are living in poverty.
And that huge number doesn’t even tell the whole story, unfortunately. The official measures of what “poverty” means are themselves inadequate. The report by the Congressional Research Service mentioned above even admits that there are certain factors that aren’t often taken into account when measuring poverty, like medical expenses, which can make a huge difference in how much money seniors have in their pockets.
“The official poverty measure used in the United States is defined using cash income only, before taxes, and is computed based on food consumption in 1955 and food costs in 1961, indexed to inflation. That definition…does not consider how certain other costs, such as housing or medical expenses, might affect [seniors] as well. After decades of research, the Supplemental Poverty Measure (SPM) was developed to address some of the official poverty measure’s limitations. The SPM poverty rate for the aged population is higher than the official poverty rate (12.8% compared with 8.9% in 2019).”
The Gerontology Institute at the University of Massachusetts Boston has gone a step further, and created an Elder Economic Security Standard Index. This index provides a better understanding of financial hardship for seniors, taking into account household size, location, housing and health status, among other variables. The index shows that, in 2016, a majority of American seniors lacked “the financial resources required to pay for basic needs.”
So the situation looks worse when we look at a more realistic measure of what it means to live on a fixed income, and when we look at more real-world scenarios, things are even more worrying. According to numbers out of the Government Accountability Office, being already in poverty isn’t the only issue for older adults: many are headed in that direction, with not much hope of turning things around. Nearly half (48%) of households headed by someone 55 and older lack some form of retirement savings, with that number rising to 62% for African Americans and 69% for Latinos.
Not only that, but 29% of those who are retired or nearing the traditional retirement stage of life still have no retirement savings or a defined benefit plan, such as a job-based pension, and will need to rely on Social Security.
What’s Gone Wrong?
Don’t get us wrong: Social Security has been a great thing for seniors. It’s probably the reason that the poverty rate among seniors has fallen so much since the middle of the twentieth century. But it’s just not enough: the average Social Security check is a mere $1,543 a month, and about 40% of older Americans rely entirely on Social Security for their income. That’s because many companies no longer offer traditional pensions, lower-income Americans often aren’t offered a feasible way to save for retirement, and many workers are not in the position to contribute to a 401k. 
Relying on Social Security alone is especially problematic for older women, who on average, receive $4,500 less per year in Social Security benefits than men because they had lower lifetime earnings and worked fewer quarters to take time out for caregiving.
And these aren’t just issues for people on the lowest end of the income scale. Again according to those working at the Gerontology Institute at the University of Massachusetts Boston on the Elder Economic Security Standard Index, “in every state, the share of older adults living ‘in the gap’ between the federal poverty line and the Elder Index is larger than the share living in poverty.” In other words, there are a lot of older adults who are actually living above the poverty line, and so don’t qualify for federal and state benefits like food stamps, housing grants, or Medicaid, but are still struggling to live a comfortable life.
Consider this: Fidelity estimates that a retired married couple, aged 65 in 2021, would need $300,000 saved to cover health care expenses in retirement, even with Medicare coverage. That’s a huge amount of money, for just that one living expense! So, even those who have been considered middle-class throughout their working life could end up struggling to pay the bills.
But we also need to remember that the problem starts even before retirement. The New School for Social Research has found that unemployed Americans aged 55 and older who want or need to work have been taking longer to find work than mid-career workers for the first time since 1973. This is partly due to the pandemic, and can have devastating effects on savings.
According to Teresa Ghilarducci, an economist and director of the New School’s Retirement Equity Lab and a Next Avenue Influencer in Aging, “With almost two million more people forced into unplanned retirement during the pandemic, vulnerable workers are forced out of the labor market at earlier ages…These few years can make or break an individual’s retirement. With fewer job prospects, and less savings, unplanned retirements can mean downward mobility or even poverty for vulnerable workers retiring before sixty-five.”
The problem, though, could also be, as Joe Seldner of the nonprofit Next Avenue puts it, “The millions over 55 without money or reasonable prospects to earn it are being ignored and overlooked, in large part I fear, because in a society driven by youth, older people don’t seem to matter all that much.”
So when we ask: “What’s gone wrong?” when it comes to making sure older adults in this country are financially secure, the answer is complicated, to say the least. Social Security is helpful, but inadequate, especially for women, jobs for older adults are hard to come by, saving for retirement can be a burden, healthcare expenses can be crippling…so what can we do?
Resources for Older Adults
As with any civil rights movement, we need to speak out about the issue of seniors’ financial security, and make sure everyone is seen and all voices are heard. It should be considered completely unacceptable that older adults in this country are struggling to survive, even after a lifetime of hard work. This issue needs to be a part of the national conversation, so speak up whenever you can, and consider contacting your members of Congress to urge them not to forget seniors when crafting legislation.
And as we work to make it a part of the national conversation, there are, fortunately, some nonprofits working on the problem, as well as resources for older adults who need assistance. For example:
- The Stanford Center of Longevity is working on initiatives for seniors, including its “New Map of Life,” which “aims to envision a society that supports people to live secure and high-quality lives for a century or more,” exploring housing, health care and financial security.
- The Center for Retirement Research at Boston College puts out briefing papers and publishes the “Squared Away” blog, which covers a wide range of topics regarding retirement security and older workers.
- The National Council on Aging nonprofit offers many resources for older people and their caregivers, including a “Benefits Check-up” that helps you find out if you’re eligible for more than 2,500 benefits programs nationwide. And its “Resources Near Me” locator directs you to ones that can help with food, health care and technology.
And speaking of government programs that helps seniors who are struggling financially, the following are worth looking into:
- Medicare Extra Help Program
- Medicare Savings Program
- Supplemental Nutrition Assistance Program (SNAP)
- The Emergency Food Assistance Program (TEFAP)
- Seniors Farmer Market Nutrition Program
- Meals on Wheels
- Low Income Home Energy Assistance Program (LIHEAP)
- Tax credits and deductions, like:
- Credit for the Elderly or Disabled
- Standard Deduction for Seniors
- Itemized deductions for medical expenses
The problem of older adults living in poverty is not going to go away on its own – if anything, more of us are going to be added to the group of those struggling. Now is the time to highlight this issue, and make sure everyone in this country can age in dignity and comfort.