Photo Credit: The New Press
December 26, 2014
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False, derogatory, stereotypes about older Americans abound.
Former Republican Sen. Alan Simpson (R-WY) has given particularly ugly voice to the noxious stereotype that seniors are self-centered retirees, driving luxury cars, enjoying endless rounds of golf, and leaving mountains of debt for their grandchildren by fighting cuts to Social Security benefits they don’t need. He routinely calls seniors and national senior organizations who object to cutting Social Security “greedy geezers,” “old cats 70 and 80 years old. . . who live in gated communities and drive their Lexus to the Perkins restaurant to get the AARP discount.” Despite polls showing that the overwhelming majority of Americans oppose Social Security benefit cuts, he categorizes opponents as follows:
“Who are the people howling and bitching the most? The people over 60. This makes no sense. You’ve got to scrub out {of] the equation the AARP, the Committee for the Preservation of Social Security and Medicare, the Gray Panthers, the Pink Panther, the whatever. Those people are lying. . . . [They] don’t care a whit about their grandchildren . . . not a whit.”
Senator Simpson’s vitriolic attacks should be ignored as ignorant ravings of little consequence. Unfortunately, as co-chair of President Obama’s 2010 deficit commission, Simpson was given a megaphone along with a gavel. And he’s enjoyed using that mega- phone. “I’ve made some plenty smart cracks about people on Social Security who milk it to the last degree,” he proudly proclaimed. “You know ’em too… We’ve reached a point now where it’s like a milk cow with 310 million tits!”
How Fare Today’s Old?
But it is just plain false that most older Americans are on “easy street,” as Simpson’s rhetoric implies. A very small percentage are, including Simpson himself. But many more are poor, or near poor. Some seniors maintain a very modest middle-class lifestyle, often struggling to make ends meet. Others, often those employed or retired with significant pension and savings, may be very comfortable in the moment. But that can change with loss of employment, death of a spouse, costly illness, drops in housing prices, or precipitous declines in stock portfolios.
Numbers provide a snapshot of how today’s old are doing at just one point in time. Over time, the finances of any of us—even those who were well off at younger ages—can, and often do, change dramatically and for the worse. Take, for example, the story of Emma and James M., retired in 1993 at ages 64 and 62, respectively.
An accountant and nurse with good work histories, Emma and James had accumulated $350,000 in their company-sponsored 401(k) retirement plans and had another $75,000 in savings and investments, plus their Social Security. With their Columbus, Ohio, home paid off and their children through college, they looked forward to enjoyable retirement years. The first ten years were just that—travel, civic involvements, friends, and grand-parenting— notwithstanding James’ diagnosis in 1997 of Parkinson’s disease, controlled fairly well with medication.
Unfortunately,
by 2003, James showed further deterioration—slurred speech, memory
loss, depression, and difficulty managing personal hygiene. By 2005,
taking care of her husband’s needs had become too hard for Emma to do
alone. She contracted with a home care agency to provide personal care
and chore services three days a week, expanding to seven days, before
James entered a nursing home in 2008 as a private pay patient, costing
roughly $70,000 a year. Besides James and Emma drawing heavily on their
joint resources, the deep recession and drop in housing prices further
diminished their resources. When James died in 2013, Emma, then 82, had
very little other than her home and Social Security. She worries how
she’ll get by if she needs support one day if the roof needs to be
replaced.
The economic wellbeing of older Americans can be measured in a number of ways, including, for example, maintenance of one’s standard of living, wealth, or ability to subsist. By virtually any measure, the majority of today’s seniors are economically vulnerable. And tomorrow’s seniors are likely, on average, to be even more so.
Let’s start with the measure involving subsistence: whether or not people have enough income to purchase the bare necessities of life.
Widely used for fifty years and adjusted annually for inflation, the Census Bureau’s official U.S. poverty index establishes poverty thresholds for households, adjusted for such factors as number of people, presence of children, rural/urban location, and age. Ironically, it sets a higher poverty line for adults under age 65 than for those over 65— $11,945 for individuals under age 65 compared to $11,011 for those over age 65 in 2012; $15,374 for couples under age 65; $13,878 for couples over 65.7. Why the difference? The short explanation: the measure assumes that older people eat less!
Even more striking is how many people are at significant economic risk. Defining persons below the Census Bureau’s Supplemental Poverty Measure as poor and those between 100 percent and 200 percent of this measure as having very modest income, at any one point in time, nearly half (48 percent) of senior households, age 65 and over, live in poverty or very modest circumstances.
In other words, nearly half are either already unable to meet some basic needs such as food, clothing, and shelter, or are one serious economic setback away from not being able to do so. The percentage of women in this category of economic vulnerability is even higher. More than one out of two—52.6 percent—are poor, or economically vulnerable and at risk. For African Americans over age 65, the percentage is higher still—63.5 percent. For Hispanics, the percentage is 70.1 percent.
Moreover, this economic vulnerability increases with age. Fifty-eight percent of those age 80 or over are poor or just one shock away from becoming poor. An astounding three-quarters of African American and Hispanic women age 80 or over are also very much at risk!
Despite the stereotype of wealthy seniors, the economic security of even those seniors who do not fall into the various categories of economic vulnerability is not assured. Their incomes are likely to decline considerably as they advance in age; as they leave work; as inflation bites into their assets; as they draw down savings, which will accelerate if their or a spouse’s health declines; or if investments falter or unexpected financial expenses arise.
All these factors and trends illustrate the fact that America faces a growing retirement security crisis.
(Copyright © 2014 by Nancy J. Altman and Eric R. Kingson. This excerpt originally appeared inSocial Security Works! Why Social Security Isn’t Going Broke and How Expanding It Will Help Us All, published by The New Press in January 2015, and is used here with permission.)
