U.S. Stumbles Toward Day of Reckoning with Rising Retirement Crisis

U.S. Stumbles Toward Day of Reckoning with Rising Retirement Crisis

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Photo: UCLA Prof. Steven P. Wallace.

SAN FRANCISCO--The United States is stumbling toward a big day of reckoning arising from the growing legions of older people in society.

Shaping the magnitude of the challenge, the number of U.S. seniors will nearly double from 41.2 million in 2010 to 81.2 million in 2040, according to Steven P. Wallace, PhD, director of the Center for Health Policy at the University of California, Los Angeles (UCLA).

In presentations to journalists and the public at the World Congress of Gerontology and Geriatrics held this summer in San Francisco, Wallace and his colleagues summarized studies, demystified

New Mexico: Elder Index Shows
Weak Income Security in State

In its 2017-2021 plan, the New Mexico Aging and Long Term Services Department says 15 percent of New Mexicans age 60-plus have incomes below the federal poverty level (FPL), while another 17 percent eke by at 125 percent of the official poverty line.

Moreover, “More than 42,330 New Mexicans age 60 and older are food insecure,” the department adds. “They are not sure they have enough money to buy food and many do not have enough to eat.”

The New Mexico Elder Index report, one of the state analyses based on the national Elder Index, highlighted significant differences in living expenses for seniors in New Mexico’s different counties between the outmoded FLP and what it takes to make ends meet in covering such monthly costs as housing, health care and food.

The Elder Index initiative involved the state department during the final phase of former Democratic Governor Bill Richardson’s administration. The project worked with an advisory council of individuals connected to the National Indian Council on Aging, AARP, Lutheran Advocacy Ministry, TEWA Women United, University of New Mexico Women’s Studies, and others.

“Older women are particularly challenged with income and assets that are typically lower than men’s,” the department noted in its report. “Their longer lifespan also means that they more often live with chronic illnesses and high health costs.”

The state agency estimates the ranks of New Mexicans age 60 or older will more than double between 2000 and 2030, with seniors age 85-plus soaring in population from 23,306 in 2000 to 75,629 by 2030.

New Mexico is projected to rank third nationally in the number of people over 60 by 2030 when, according to a department projection, at least 343,000 residents in that demographic group will comprise nearly 17 percent of the overall state population.

In 2016 the University of Massachusetts, Boston, now working the National Council on Aging compared the lot of elders in the 50 states, using the Elder Index. For single seniors, New Mexico ranked 29th nationally in elder economic security, with slightly more than half of older people having income below the index of economic security. That compared with 21.9 percent falling below the FPL. Older couples fares slightly better.

--Kent Paterson

statistics and shared personal accounts that collectively portend a coming societal train wreck if public policies aren’t changed.

Health is one arena where this is increasingly evident not only in the U.S., but also internationally, dramatized by the obesity and diabetes epidemics and the host of wellness problems that stem from them.

Major Concerns for Spanish Speakers

“I think there are major concerns across the continent. I think the U.S. needs to address that more, particularly with Spanish-speaking people,” said Rebecca Wong, PhD, distinguished professor in health disparities at the University of Texas Medical Branch, Galveston.

Wong attributed a good part of the health crisis to new, urban lifestyles and the rampant consumption of junk food and soda. “We struggle with soda consumption. If we got rid of soda we’d solve half the problem,” she contended. “It’s been a hard problem for the U.S. and it’s sweeping Latin America as well.”

For the University of Southern California’s (USC) William Vega, PhD, Latin America and the United States are in the same stormy waters when it comes to retirement and caregiving for a vastly bigger segment of the population.

“They both have issues of how they are going to finance all this,” said Vega, executive director of USC’s Edward Roybal Institute on Aging. ”It is an enormous challenge, just as it is in the U.S.”
Vega said core questions framing the future include: “How is inequality producing an effect and governing our ability to do these things?” And, “How in the world is this going to be financed, and bring equity?”

He calls “dual vulnerables” the older individuals who are deported from the U.S. to Mexico and unable to collect social security in either country but now find themselves isolated from long-changed family networks.

Senior Poverty Understated

Senior poverty is a huge issue shadowing the graying of societies across the Americas.

Although UCLA’s Wallace pegs the current poverty level of U.S. seniors at 8.8 percent of the total, he and other colleagues questioned the federal poverty line of $12,060 for one person (in the lower 48 and Washington, D.C.), which dates back to concepts developed during the 1950s and 1960s.

As the cost of living increases, the official poverty level significantly downplays the numbers of seniors who live on an economic cliff, with 52 percent of older persons subsisting on incomes at of below 200 percent of the poverty line ($24,120) and 62 percent reporting medical hardships, said Melinda Abrams, vice-president of The Commonwealth Fund.

Poverty cuts unequally, with senior women, African Americans, Latinos, Native Americans and Asian Americans all suffering higher rates than older, white males. In today’s U.S., two-thirds of seniors who live in poverty are women.

Of older women who have annual incomes below $10,000 per year, 34 percent are Latina, 25 percent are African American and 10 percent are white, reports Carroll Estes, PhD, sociology professor and founder of the Institute for Health and Aging at the University of California, San Francisco (UCSF).

Estes detailed ethnic inequalities among seniors who are dependent on at least 90 percent of their income from Social Security. She said 53 percent of Latinos falling into that category, 45 percent of African Americans, 41 percent of Asians and 32 percent of whites.

Citing a 2015 Urban Institute report, Estes, a former chair of the National Committee to Preserve Social Security and Medicare, sketched differences in liquid retirement assets (cash or savings) held by some U.S. ethnic groups.

While whites averaged $130,000 in assets, she said, blacks possessed $19,049 and Latinos only $12,329. Crunched on a median basis, the retirement savings gap among the three groups is still unequal but not as vast, with whites counting $5,000 in assets versus blacks and Latinos, who have zero.

Seniors’ Realistic Cost of Living

Geography is another key factor in assessing the scope of the senior financial crisis. For instance, a monthly $800 Social Security check in San Francisco, where a one-bedroom apartment easily fetches $2,411 per month, is a pittance compared with the buying power of the same check in Brownsville, Texas. There, rent for the same sized apartment goes for $536 monthly, calculates Bob Harootyan, research manager for Senior Service America, Inc., a nonprofit advocacy organization based in Silver Spring, Md.

Paltry Social Security incomes, the historic decline in defined-benefit pensions in favor of market-based personal retirement accounts, and the dearth in savings nestled away for retirement all cast gloom on the “golden years” for millions.

Collectively, these trends indicate the famous “three-legged stool” promoted as the pillar of a comfortable retirement is a wobbly one.

“U.S. families face a declining standard of living in retirement, said Nari Rhee, director of a retirement security program at the University of California, Berkeley. “Generation after generation, we’re seeing downward mobility.”

In an effort to develop a realistic profile of the costs and necessities of elders, researchers Ellen Bruce and Laura Henze Russell of the University of Massachusetts, Boston (UMB) devised the Elder Economic Security Standard Index, or Elder Index, which measures the amount of income

Elder Index CA.JPG

necessary for older adults to “maintain their independence” while enjoying a dignified standard of living. The Elder Index examines costs for housing, health care, transportation, food and assorted expenses.

“The surprising thing for everyone is how so many people are living on so little money. That’s an astonishing thing,” said Jan Mutchler, PhD, director of the UMB Gerontology Institute’s Center for Social and Demographic Research in Aging, which oversees the Elder Index work.

Quarter of Seniors Can’t Cover Costs

Among the noteworthy findings of the ongoing project is that one-fourth of all U.S. residents age 65 and above don’t have enough income to cover basic monthly expenses.

Beginning with Massachusetts more than a decade ago, the Elder Index initiative, then a joint project of Mutchler’s school and Wider Opportunities for Women, expanded into studies of other states and issued detailed, county-level profiles.

For instance, in New Mexico’s Doña Ana County, which include Las Cruces, a report highlighted the gulf between average Social Security benefits in 2009 ($12,201 for individuals, $19,852 for couples) and annual living costs ranging from $15,408 and $33,192, depending on particular housing expenses.

Typically, a “flurry of attention” greets the Elder Index reports but then fades away into the news cycle, Mutchler laments. Despite the widening gap between senior incomes and living costs, Mutchler doesn’t detect serious movement on the crisis in today’s Washington, D.C.

“There aren’t any big initiatives I see that are targeting this issue and the cost of living,” she said. Mutchler, however, is optimistic about state and local action. In Massachusetts seniors can work off property taxes at places such as the local school, library or fire department, she said.
Policy-wise, Mutchler credits the state of New Jersey for systematically employing the Elder Index. California also adopted it as a planning tool for its agency on aging.

Grace Egan, executive director of the nonprofit New Jersey Foundation for Aging, credits the hard work of her organization and its partners since 2008 for gains that include meeting with lawmakers who ultimately passed a bill enacted in 2015, requiring the state Department of Human Services to use the Elder Index, to the extent possible, in improving public benefits and services and as a planning tool for the allocation of public resources.

According to an e-mail from Egan, the New Jersey government “realized that a significant number seniors enrolled in the N.J. Prescription Benefit known as PAAD would be eligible for SNAP (food stamps). Eventually, Senior SNAP enrollment doubled under the existing eligibility guidelines. This increase was accomplished with community and State partners.”

“The first reach was with nutrition programs, however the biggest benefit is affordable housing,” Egan wrote. “We are currently working with housing stakeholders to explore ways to increase affordable housing options for low-income seniors, persons with disabilities and the chronically homeless.”

Answers on the U.S.-Mexico Border

The University of Texas Medical Branch’s Rebecca Wong considers the U.S.-Mexico border a region fertile with answers to the international aging crisis. Wong said the region may be a “perfect place” to try binational problem-solving because of region’s similar language and lifestyles. Possible cross-border efforts might include a range of issues, such as a “just say no” soda-and-salt reduction campaign to training Mexican nurses and in-home health care providers who could serve the nurse-short U.S.

Other issues Wong said should be on the hemispheric agenda include opening up the U.S. market to lower-cost pharmaceuticals produced in Latin America and reforming social security systems.

But she acknowledges that the political atmosphere for such collaborations is in a testy phase, illustrated by the case of a potential Mexican student who expressed deep reservations about relocating to this side of the border. “’I’m thinking it’s not a good time to come to the U.S.,’ ” Wong recalled the prospective female student saying.

Wong said she assured the young woman that everything would be “okay” and welcomed her aboard, but the applicant decided to stay in Mexico. Hence, the Lone Star state lost a new student.

Political winds aside, the veteran Texas health care researcher insists that the U.S. and Latin America have a common stake in addressing older-adult and health care challenges. “It totally makes sense to work binationally because the populations are so intertwined and interact with each other,” Wong added.

Kent Paterson is an independent journalist covering issues in the U.S./Mexico border region and a fellow in the 2017 Journalist in Aging Fellowship Program. Enlisting a diverse cross-section of journalists from across the United States, the program is sponsored by the Gerontological Society of America (GSA) and San Francisco-based New America Media (NAM). As part of his fellowship, Kent attended the World Congress in San Francisco with the support of NAM, GSA and the Silver Century Foundation.