Editorial: The Challenges Of Living On A Fixed Income

Editorial: The Challenges Of Living On A Fixed Income


An editorial from the Rutland Herald:

 

Research was released this week that shows just how fixed it is for New England senior citizens to live on fixed income. According to Kaiser Family Foundation, more than half of older women living alone — 54% — are in a similarly precarious financial situation: either poor according to federal poverty standards or with incomes too low to pay for essential expenses. For single men, the share is lower, but still surprising — 45%.

That’s according to a valuable but little-known measure of the cost of living for older adults: the Elder Index, developed by researchers at the Gerontology Institute at the University of Massachusetts-Boston.

According to KFF, the Equity in Aging Collaborative is planning to use the index to influence policies that affect older adults, such as property tax relief and expanded eligibility for programs that assist with medical expenses. Twenty-five prominent aging organizations are members of the collaborative.

The goal is to fuel a robust dialogue about “the true cost of aging in America,” which remains unappreciated, said Ramsey Alwin, president and chief executive of the National Council on Aging, an organizer of the coalition. Nationally, and for every state and county in the United States, the Elder Index uses various public databases to calculate the cost of health care, housing, food, transportation and miscellaneous expenses for seniors, according to KFF. It represents a bare-bones budget, adjusted for whether older adults live alone or as part of a couple; whether they’re in poor, good or excellent health; and whether they rent or own homes, with or without a mortgage.

Results from the analyses are eye-opening.

According to the report, in 2020, according to data supplied by Jan Mutchler, director of the Gerontology Institute, the index shows that nearly 5 million older women living alone, 2 million older men living alone, and more than 2 million older couples had incomes that made them economically insecure.

And those estimates were before inflation soared to more than 9% and older adults continued to lose jobs during the second and third years of the pandemic.

Nationally and in every state, the minimum cost of living for older adults calculated by the Elder Index far exceeds federal poverty thresholds, which are used to calculate official poverty statistics.

According to the KFF report, the Elder Index estimates that a single older adult in good health paying rent needed $27,096, on average, for basic expenses in 2021 — $14,100 more than the federal poverty threshold of $12,996. For couples, the gap between the index’s calculation of necessities and the poverty threshold was even greater.

Yet eligibility for Medicaid, food stamps, housing assistance and other safety net programs that help older adults is based on federal poverty standards, which don’t account for geographic variations in the cost of living or medical expenses incurred by older adults, among other factors, KFF reports.

According to Kaiser Health News, in April, University of Massachusetts researchers showed that Social Security benefits cover only a fraction of what older adults need for basic living expenses: 68% for a senior in good health who lives alone and pays rent and 81% for an older couple in the same situation. “There’s a myth that Social Security and Medicare miraculously take care of all of people’s needs in older age,” Alwin told Kaiser Health News. “The reality is, they don’t, and far too many people are one crisis away from economic insecurity.”

But now we are faced with an even greater challenge: inflation. The cost of basic needs and fuel is at a 40-year high.

When it ends its latest policy meeting Wednesday, the Federal Reserve is expected to impose a second consecutive three-quarter-point hike, elevating its key rate to a range of 2.25% to 2.5%. It will be its fourth rate hike since March, when it announced a quarter-point increase. Since then, with inflation setting new four-decade highs, the central bank has tightened credit ever more aggressively.

According to The Associated Press, since the Fed met in June, the government has reported that inflation accelerated to a 9.1% annual rate, the most since 1981. Though that jump reflected a spike in gas prices, which have since declined, inflation worsened even after excluding the volatile energy and food categories.

The effects are hard on all Americans, but especially older Americans. In a state like Vermont, where the population is graying, that is something that is taking a toll — and perhaps a greater one than we are even aware.



 

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