Explore the topic of aging in America through in-depth stories, data and interactive content at governing.com/generations.
If you are a senior citizen in Seminole County, Fla., you might consider yourself lucky. The county is home to the Seniors Intervention Group, a coalition of not-for-profit organizations and businesses dedicated to ensuring that the county’s older population doesn’t get lost behind closed doors in poverty and neglect. The group provides help ranging from cash assistance and transportation, to home repair, retrofitting and cleanup.The genesis of the Seniors Intervention Group can be traced to a single person: Zach Hudson, who joined the city of Lake Mary’s police department in 2007. Shortly after arriving on his beat, Hudson began noticing something troubling. He’d go to a call involving an elderly resident victimized by fraud or some other crime and would discover what could arguably be described as a more serious issue than the one he was being asked to investigate: far too many seniors in Lake Mary who were just barely scraping by.
“I went to the home of a mother who was in her 90s living with her daughter who was in her 70s, and they had no electricity and very little food,” says Hudson. “They were cutting pills in half to save money.” When he tried to get them help, he discovered that, in essence, there wasn’t any.
No state, county or city agency was there to step in and pay the electric bill, fill the refrigerator with food or secure adequate medication. In matters of acute physical or mental health problems, says Hudson, there were some potential support services available. But when it came to simple, basic poverty -- elders who had fallen through the cracks due to a lack of resources -- help was hard to find.
“We have 10,000 people turning 65 every day,” says Hudson. “And the fastest growing segment of homeless are among the elderly. Can you imagine being 85 and homeless?”
“The data on boomer finances is troubling,” agrees Margaret Neal, head of the Institute on Aging at Portland State University in Oregon. “The fact that we just aren’t saving enough for retirement is concerning.”
That fact has set up an interesting tension when it comes to the study of aging in the U.S. On the one hand, there has been a considerable amount of work on how to make communities more livable and friendly for the elderly -- how streetscapes, co-housing, public transportation, food supply, recreation centers, volunteer opportunities, continuing education and so forth can all be blended to make for a rich and positive aging experience. Less attention has been paid to the darker side of aging. Many elders are ill-prepared to shoulder the cost of retirement, and the gap between what seniors need to live on versus what they have might land squarely on state and local governments.
Take, for example, a recent report from Clark County, Wash., on the impact of the aging population there. Finalized last February, the report is an exhaustive but relatively upbeat assessment on what the county should be doing to prepare. It includes a wide variety of recommendations. Some would cost significant amounts of money (“Provide bus rapid transit or light-rail transit service to areas where the density and ridership will support it”); other recommendations would require new levels of intergovernmental coordination (“Develop a village to village program to encourage aging-in-place”); and others are flat-out hopeful exhortations (“Encourage the development of a geriatric mobile outreach program”). Still, the county has been able to make progress on a handful of the report’s recommendations, says Marc Boldt, the county commissioner who pushed for the study, none of which have cost much money. They include a voluntary age-friendly building code, some park improvements and a new approach to subdivision planning that discourages cul-de-sacs. The county has also helped launch a Web-based service that connects elders who need help with things like shopping and lawn care with volunteers willing to step up.
But then the report gets much more real -- and the recommendations a whole lot thornier -- with the introduction of an “Elder Economic Security Index” for Washington counties. The index looks at the costs of independent living for elders, including their household size, health status, geographical location and whether they rent or own their home. Then it uses that data to calculate the level of income necessary to support an independent, age-in-place lifestyle. According to the report, “The Elder Index, with its modeled scenarios for older adults living in different circumstance, shows the difficulties low- and moderate-income elders confront in meeting their living expenses. In every county in the state, elders who live at the federal poverty level, or who are totally dependent on the average Social Security payment in 2009, need housing and health-care supports to make ends meet. Long-term care adds significant costs.”
As the Elder Index lays out, older people who own their homes outright, who are in relatively good health and who reside in areas where the cost of living isn’t too high can get by on a relatively modest amount of money. But throw in a mortgage and poor health, and the amount of income needed to live independently quickly skyrockets.
Looking at the looming fiscal crisis among the elderly and the limited government resources available, Boldt says, “I think we’re going to have to acknowledge that other cultures do this much better than we do” regarding intergenerational caretaking. “We’re where we are because our parents helped us, so maybe it’s time to help them out with things like housing, having a cottage in the backyard.”
When it comes to the story of aging in America, there are two bottom lines. The first is that everyone is getting older. That of course brings attendant health and mobility issues, as well as added costs. (According to one of the bleaker assessments on the American Medical Association website, by age 65, two-thirds of Americans will have at least one chronic disease and will be seeing seven different doctors; a fifth of elders will have five or more chronic diseases and will be tangled up with 14 doctors.) The second bottom line is that a huge proportion of our rapidly aging population simply isn’t going to have the financial resources to live out their lives in independent comfort and security.
The data on poverty -- and potential poverty -- among the elderly are sobering. AARP has documented an alarming increase in home foreclosures among those over age 50, with 2011 witnessing 1.5 million of them, a 23 percent increase from 2007. And the problem is getting worse. “Americans 65 and older sustained the largest increases in poverty of any group in 2009,” according to a 2011 AARP report on the relative readiness of local governments to handle their rapidly aging populations. Affordable housing opportunities -- obviously a key alternative for middle- and low-income elders -- declined from 2005 to 2011, the report said. Meanwhile, local governments facing their own fiscal difficulties have scaled back on things like property tax breaks for the elderly.
There’s a simple, fundamental reason for the looming economic insecurity among elders: They haven’t saved enough money. “It’s a very bleak picture,” says Alicia Munnell, director of the Center for Retirement Research at Boston College. According to the latest data, says Munnell, people ages 55 to 64 have approximately $120,000 total on which to retire. “You can imagine how long that’s going to last.”
It’s not the cost of living that’s really the problem here, says Munnell. It’s the cost of trying to stay alive. Things like the cost of food, housing, heat and other day-to-day necessities will certainly contribute to fiscal hardship, says Munnell, but they’ll be nothing compared to the cost of health care. Total U.S. health-care expenditures will surpass $3 trillion in 2014 and reach $4.8 trillion in 2021, according to the Centers for Medicare & Medicaid Services. “If we could somehow bend the health-care cost curve, that would make a lot of difference,” says Munnell. “Other than that I can’t see that this is anything but bad news.”
Meanwhile, Munnell’s center recently updated what’s known as the National Retirement Risk Index, which measures the share of working households that are “at risk” of an inability to maintain pre-retirement living standards upon leaving the work world. They found that the working household risk index jumped from 44 percent in 2007 to 53 percent in 2010. That’s nearly a 25 percent increase. “Even if households work to age 65 and annuitize all their financial assets, including the receipts from reverse mortgages on their homes,” says the report, “more than half are at risk of being unable to maintain their standard of living in retirement.”
That finding squares almost exactly with what states now using the Elder Economic Security Initiative (EESI) have calculated by way of income insecurity among the elderly. Besides Washington, 16 other states have deployed the EESI, which was developed by the organization Wider Opportunities for Women. The EESI is an adaptation of another index the organization had developed around the time of welfare reform, says Acting President and CEO Shawn McMahon, when the organization decided to take on what it viewed as the fuzzy math of the U.S. Census Bureau’s poverty rate. “We asked, ‘What does a family really need to be independent?’” says McMahon. “In the mid-2000s we realized we needed to ask the same question for elders.” The answer? A lot more. Fifty-two percent of seniors are economically insecure.
There are, of course, significant variables in all of this. Single women and minorities are disproportionately represented as income insecure. Meanwhile, one of the Retirement Center report’s key assumptions around the Retirement Risk Index is based on a figure that’s rapidly gliding north: that 65 is the magic and essential age at which Americans all throw in the towel. Another possible bright spot, according to data from the Institute on Aging, is that more than half of all new small business startups are being launched by those 55 and older.
But even given the likelihood that Americans will be working longer and retiring at an older age, poverty experts like McMahon despair over the relative readiness of states and localities to deal with the looming needs -- and costs -- associated with an aging population.
The pressure on states and localities will be especially acute in light of the federal government’s unwillingness to “reform any known system in favor of elders,” McMahon says. If anything, the feds are trying to figure out how to cap or at least better control entitlement costs, whether it’s Medicaid, Medicare or Social Security.
McMahon does, however, appreciate the fact that the issue of poverty among the elderly is at least starting to come up more often on the country’s radar. He cites, for example, a new law passed by the California Legislature requiring so-called “triple A’s” -- area agencies on aging -- to use the EESI as part of their long-range policy planning. Other states, he says, have used the EESI to make the case for things like increases in supplemental security income and home heating assistance.
Others are a little more sanguine. Matt Thornhill, who runs an elder-focused market research firm in Richmond, Va., called the Boomer Project, is working with AARP on amassing a database of state and local action related to dealing with the wave of aging boomers. It’s a sign, says Thornhill, that state and local governments are at least waking up to the demographic wave starting to roll over them.
But the question remains: Will the response to the needs of an aging population be a multisector and intergovernmental mosaic, or a haphazard mishmash that will inevitably leave the most unfortunate impoverished elderly to fall through the cracks?
“I wish I could say otherwise, but I think the current system is going to persist,” says McMahon, “with this mix of often inadequate private-sector donations, church charity and local nonprofit efforts to fill gaps that good incomes and governments used to fill.”
McMahon adds, though, that he sees “some hope” in the fact that more people are at least becoming more attuned to the historic demographic shift that’s occurring, and the financial challenges that will come with it. So even the most pessimistic agree that the message of a looming and huge group of impoverished seniors is starting to get through. That’s the good news. The very real bad news is that what many would like to characterize as the silver cloud of opportunity represented by rapidly aging boomers at the moment appears to be defined by a decidedly dark lining.
