Economic Insecurity Among Older Adults
Chris Herman, MSW, LICSW
NASW-DC Senior Practice Associate
As the baby boom generation moves into older adulthood and the overall U.S. population ages, discussion abounds among practitioners, policymakers, and the media regarding the economic implications of the impending “silver tsunami.” Frequently underlying such discussions is a stereotype that older adults are not only wealthy, but also are enjoying financial security at the expense of younger generations. Yet, many older adults experience economic insecurity, and others are aware their resources may not be sufficient to meet their needs as they continue to age. This publication highlights some of the economic challenges of aging in the U.S. and provides strategies, tools, and resources to help social workers address those challenges.
Poverty Among Older Adults
In 1959, people 65 years and older constituted 35 percent of people living in poverty, the highest of any age group. By 2012, that figure had dropped to about 9 percent, or 4 million older adults (DeNavas-Walt, Proctor, & Smith, 2013), with poverty rates highest among people aged 80 or older (U.S. Social Security Administration [SSA], 2012). Many attribute this drama tic decrease to the success of the Medicare, Medicaid, and Social Security programs. An even greater number of older adults are near poor; in 2012, almost one in four older adults (more than 10.5 million people) had incomes exceeding, but lower than 200 percent of, the federal poverty level (FPL). Unmarried older adults (especially women) and older African Americans and Latinos are especially likely to live in or near poverty (SSA, 2013).
Lack of Poverty ≠ Economic Security
The federal poverty level has long been criticized as an inadequate measure of economic security. In an attempt to address this concern, a federal interagency working group recently developed the Supplemental Poverty Measure (SPM), which takes into account noncash benefits (such as housing subsidies), geographic variations in cost of living, and a variety of nondiscretionary costs. Using the SPM, the percentage of older adults living in poverty in 2012 increases to nearly 15 percent, or 6.5 million (Short, 2013). The SPM is not used to determine eligibility for governmental benefits, however. The Elder Economic Security Standard ™ Index, developed by the Gerontology Institute at the University of Massachusetts Boston and Wider Opportunities for Women (WOW), takes the notion of income adequacy a step further. The Elder Index measures the amount of income required to meet older adults’ basic needs, including health care, housing, transportation, and long-term services and supports (LTSS), without public or private assistance. Designed for retired adults aged 65 and older, the Elder Index takes into account varying expenses based on geographical location (state, county), health status (excellent, good, poor), and housing (rental, ownership, presence of a mortgage) and excludes unnecessary expenses, such as entertainment or gifts (WOW, 2011, 2014). As of early 2014, the U.S. average annual index for a single older adult ranges from $18,864 to $31,404—a “conservative estimate” (WOW, 2014, para. 2) that far exceeds the FPL of $11,670 (Annual Update of the HHS Poverty Guidelines Notice, 2014).
Varying definitions of income adequacy and poverty notwithstanding, many older adults with incomes exceeding the FPL, SPM, and Elder Index still live on modest means. The 2012 median income of older adults was $33,848—not quite 60 percent of median income of people younger than 65 (DeNavas-Walt et al., 2013). Furthermore, older adults spend a greater proportion of their income on expenses than other age groups do (U.S. Department of Labor [DOL], 2013). A 2013 survey of older adults reveals an even more personal view of economic insecurity among older adults. Nearly one-fifth of survey respondents reported having difficulty paying their monthly living expenses, and more than half expressed concern that they may not have enough resources to last their entire lives (National Council on Aging, UnitedHealthcare, & USA Today, 2013)...
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- Factors Contributing to Late-Life Economic Insecurity
- Strategies to Reduce Late-Life Economic Insecurity
- Tools Social Workers Can Use to Enhance Older Adults’ Economic Security
- Other Related Resources