Seniors Without Savings

I’ve written previously about the difficulties faced by older adults who haven’t saved for retirement. For example, in this post from 2013 I wrote about the large numbers of Americans who will either have to delay retirement or work during retirement in order to make ends meet. In 2015 I wrote about William McPherson, a Pulitzer-prizewinning journalist who at age 81 was impoverished and had to depend on his daughter for such expenses as major dental work. Not surprisingly, as the numbers of elderly grows, the problem of elders living in poverty is also growing. A recent article by  Atlantic staff writer Alana Semuels provides information on poverty in elderly Americans. She notes that the poverty rate among seniors is increasing:

Older Americans were the only demographic for whom poverty rates increased in a statistically significant way between 2015 and 2016, according to Census Bureau data. While poverty fell among people 18 and under and people 18 to 64 between 2015 and 2016, it rose to 14.5 percent for people over 65, according to the Census Bureau’s Supplemental Poverty Measure, which is considered a more accurate measure of poverty because it takes into account health-care costs and other big expenses.

The trends which have contributed to this increase in poverty among older adults will continue for the foreseeable future. Fewer and fewer employers offer pensions. According to Census Bureau researchers, two-thirds of Americans don’t contribute anything to a retirement plan. Last decade’s housing bust wiped out or greatly reduced the equity many middle-aged or elderly workers had in their homes. Work has become less stable, and periods of unemployment can rapidly deplete savings. Many retirees end up trying to live on Social Security alone, but the average benefit falls well short of what most people need to cover basic expenses. It’s hard to argue with Semuels when she states, ” The current wave of senior poverty could just be the beginning.”

In this environment, I’m one of the fortunate ones. I recently sold my house, getting quite a bit less for it than what I paid in 2006, but walking away with enough that I should be able to buy a modest home near one of my children. I get more than the average Social Security benefit and have sufficient savings that I can cover not only my regular monthly expenses but additional expenses like car repairs and taxes. I work about 10 hours a week; the extra money is nice, but I don’t have to rely on it.

In contrast, many older adults are struggling to make ends meet. Semuels tells of Roberta Gordon, who worked a variety of jobs through the years–nursing aide, telemarketer, librarian, house cleaner–but never earned a pension, didn’t manage to save anything, and at some jobs didn’t even pay into the Social Security system. At age 76, her monthly income of $915 from Social Security and SSI didn’t even cover her rent. She worked every Saturday handing out samples at the local grocery store, but still couldn’t meet her expenses.

Telling people that they should save more for retirement tends not to be helpful; most people who aren’t saving know they should, and many make plans to do so, but low wages, periods of unemployment, medical expenses, car repairs and the like work against them. It hasn’t helped that the very modest government programs that were available to help people save are being cut back or eliminated. And seniors like Roberta Gordon who are already retired and living in poverty can’t benefit from programs aimed at helping working-age adults save. What can make retirement more affordable? Semuels suggests such public policies as “expanding affordable housing options, creating programs to help seniors cover medical costs, and reforming the Supplemental Security Income program so that poor seniors can receive more benefits.” The first of these is what helped Roberta Gordon. She received a form of housing assistance known as a Section 8 Voucher, which substantially reduced her rent.

Unfortunately, Section 8 is plagued with problems. There are long wait times to obtain vouchers, and much of the housing available to voucher-holders is substandard. Could our nation improve Section 8 and also create or expand programs to reduce the financial burden on impoverished seniors? Sure. But that would take political will, and it would take money. Do we value the well-being of the elderly as much or more than we value shrinking government and reducing taxes? I wish the answer was ‘yes’, but I fear it is ‘no’.

Substandard Housing in West Virginia. Image from Wikimedia Commons.

About Bob Ritzema

I am a fourth-generation American of Dutch ancestry and am trained as a clinical psychologist. In 2012, I retired from Methodist University in North Carolina to return to . Michigan to help family. I maintain a part-time therapy practice in Grand Rapids. I currently worship at Monroe Community Church in Grand Rapids. I can be reached at
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