‘ True Cost of Aging ’ Index shows many seniors can ’ t afford basic necessities
Judith Graham , Kaiser Health News
Fran Seeley , 81 , doesn ’ t see herself as living on the edge of a financial crisis . But she ’ s uncomfortably close .
Each month , Seeley , a retired teacher , gets $ 925 from Social Security and a $ 287 disbursement from an individual retirement account . To make ends meet , she ’ s taken out a reverse mortgage on her Portland , Maine , home that yields $ 400 monthly .
So far , Seeley has been able to live on this income — about $ 19,300 a year — by carefully monitoring her spending and drawing on limited savings . But should her excellent health worsen or she need assistance at home , Seeley doesn ’ t know how she ’ d pay for those expenses .
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 .
A new coalition , 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 U . S ., the Elder Index uses various public databases to calculate the cost of health care , housing , food , transportation , and miscellaneous expenses for seniors . 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 . 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 % — a 40-year high — and older adults continued to lose jobs during the second and third years of the pandemic . “ With those stressors layered on , even more people are struggling ,” Mutchler said .
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 . ( Federal poverty thresholds used by the Elder Index differ slightly from federal poverty guidelines . Data for each state can be found here .)
One national example : 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 . ( This isn ’ t an issue for older adults alone ; the poverty measures have been widely critiqued across age groups .)
“ The poverty rate just doesn ’ t cut it as a realistic look at the struggles older adults are having ,” said William Arnone , chief executive officer of the National Academy of Social Insurance , one of the new coalition ’ s members . “ The Elder Index is a reality check .”
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 .
16 Senior Resource Guide 2022