In 2015, over 4.2 million people over 65 were below the poverty level (U.S. Census Bureau). Caubanski, Kamo, Damico & Neuman defined poverty to mean that these individuals were living at or below the federal poverty level, which is $11,367 per year for a single person. When elderly reach this poverty level there begins to be a struggle in many areas in their lives. Some of these area include the housings market and cost of mortgages, health care expenses, poor resources of food, a lack of reliable transportation, and diminished savings and pensions. For those above the poverty level, it seems that if there is one major life change or event, the lifestyle they are accustomed to can be pulled out from under them and begin to face struggles to make ends meet. The Census Bureau’s recent poverty report for most age groups in America revealed a trend that poverty among older Americans is on the rise. “Individuals ages 65 and older had the unique distinction of being the only population segment to experience a significant increase in the number of individuals in poverty, with 367,000 more older Americans in poverty in 2016,” (Nicolaci da Costa, 2017).
These facts do not tell the whole story and how these issues affect the elderly population. There are many issues contributing to these struggles. Caubanski, Koma, Damico, & Neuman (2018) state these struggles for seniors will only increase by a number of factors. To get a more complete understanding of poverty, one must consider three key issues affecting elderly Americans: health care, housing, and retirement.
Today, many older workers under the age of 65 are choosing to delay their retirement due to a decline in employer benefits for health care plans. A large number of these workers are not yet eligible for Medicare and the lack of a health care safety net drastically raises their risk of financial woes and instability. It seems that the elderly Americans already small budgets are stretched even further by higher expenses in health care. Medical spending for those between the ages of 55 and 64 is almost twice the amount spent by those between the ages of 35 and 44 and this trend just continues to escalate (Komisar, 2013). When we look at medical costs, out-of-pocket medical expenses such as prescription drugs, long-term care, and medical supplies rise dramatically with age. These medical expenses are often not covered by health insurance and therefore deplete their savings.
According to a project by Komisar (2013), costly health care expenditures from a serious illness before a patient is will even be eligible for Medicare in addition to the inability to work during and after an illness are becoming all too common factors of a financial crisis among those 60 and older, and there income is significantly reduced. There are other ways poverty has affected healthcare. One is that health care costs have contributed to the large rise in bankruptcy filings among the elderly. Elderly debt has risen faster than any other group because seniors have turned to credit cards and home equity loans to pay for medical expenses and other debts. Also, low-income elderly tend to have more chronic and debilitating health challenges that increase the health care payments. Poverty rates for the elderly have risen much faster than those of other age groups due to their incomes being reduced and squandered and due to the medical out-of-pocket spending that almost doubles for seniors.
In addition to rising health care costs, seniors have been hit the hardest by the housing problems facing this country. When seniors are needing to downsize, many are unable to sell their homes in a diminishing housing market, and thousands of them who need support and care are unable to move into retirement communities and assisted-living facilities. Growing numbers of elderly are essentially stranded in their own homes. Many simply cannot afford the upfront payment it requires to move into senior living environments without their homes selling.” According to data from the National Investment Center for the Seniors Housing and Care Industry (Nicolaci da Costa, 2017), it appears that in many areas of our country where there is a weak economy, the vacancies in Continuing Care Retirement Communities (CCRC) and other independent and assisted living facilities have been rising.
Thousands of elderly homeowners or renters have faced foreclosure and evictions. Nearly a third of senior homeowners still have a mortgage. Many of those seniors pay more than one-third of their income on housing costs and for older renters, poverty and the burden of housing costs are an all too common issue. In 2015, 78% of older renters spent more than one-third of their income on housing costs (Moody & Sasser, 2018). As seniors age, they tend to also live in older homes and so for elderly homeowners, their income will be drained due to repairs.
In 2010, it was expected that as the first baby boomers reached 60 there would be a sudden leave from the workforce; however, due to a weakened economy and healthcare costs on the rise, those again individuals are delaying retirement (Walls, 2016). Retirement income is often described as a “three-legged stool”: a defined benefit pension, Social Security, and personal savings (Moody & Sasser, 2018). Today, low-income Americans, rarely have a pension or even a sufficient savings and the percentage of those relying on Social Security benefits alone have risen. It was noted that in the last decade the United States has seen a significant shift away from defined benefit pensions and a plunging personal savings rate, essentially shortening two of the stool’s three legs (Ortman, Velkoff and Hogan, 2014).
The first aspect to look at in regards to the retirement struggle among elderly is that the trend over the past ten years has shown that the youth labor rate is nearing an all-time low, but more aging Americans are now in the job market than at any other time since the Great Depression (Edwards, Bee & Fox, 2017). According to Walls (2016) it is projected that the elderly Americans will have its largest increase in the labor market, and estimates that by 2020 the number of workers between the ages of 65 and 74 and those age 75 and older will rise by more than 70 percent. The recession in 2008 has started a trend for these seniors and ended up redefining retirement for aging Americans. Instead of being certain of their retirement dreams, they have instead realized that their 401k have been depleted, along with their IRA and all other forms of investment savings they have worked for over the years. Due to their age, they do not have the luxury to make up for their losses over time. It is this very dilemma that is forcing the blurred lines of the workforce and retirement, and pushing more to stay in employment longer.
The other aspect to look at is that poverty varies by sociodemographic factors and is higher for some groups than for others (Moody & Sasser, 2018.) Aging women, for example, are more likely than older men to need to work because women earn less than men and are more likely to need to funds to live. They will have lower monthly Social Security benefits than men and smaller pensions from their employers. Women tend to live longer than men and this results in them using up their savings and there is a need to stay in the workforce for an extended period of time.
After looking much more closely at health care, housing, and retirement, it seems that weak economic conditions have only increased and created more barriers of financial security for aging Americans. By looking at our baby boomer population, it is evident that this problem will only continue to grow. It is up to the younger generations to give back and find ways to give them a means to live due to their years given in the work field. Older Americans who live in poverty cannot avoid its consequences. They will continue to face that reality every day. Health care, housing and retirement affects show that it is not the cost of living that is the problem, it’s the cost of trying to continue to live and be a functioning member of society. There should always be a place for the retired and policymakers need to find ways and create legislation that support all working adults and continue to help them maintain financial stability throughout their lifetimes, and well into retirement.? ?
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