While it may be hard to believe, the poverty rate among people age 65 or older is now under 9%. This is close to, or at a record low, according to the United States Census Bureau. Older Americans also have a lower poverty rate than the general population, which currently stands at about 13.5%.
This may be hard to believe for many people, mostly due to the fact that annual cost of living increase from Social Security have been mostly flat over the last few years and some costs, specifically medical and prescription drug bills, have continued to increase at a rapid clip. However the data does not lie. There are only about 8.8% of senior citizens (many of them who are retirees) that are living in poverty. Many of them are also actively seeking support from agencies that focus on offer help to low income seniors.
The rate during the 1980s and 1990s was much higher. Throughout those two decades there were anywhere from 12 to 15% of senior citizens living in poverty. So over the last 10-15 years there has been significant progress made in helping our older generation.
There are major differences when it comes to gender, ethnicity, and age as well. In general, the 2016 poverty rate among women over the age of 65 is about 40% higher than males. While there is no definitive reason for this, many experts believe it is because in the past, females often left the workforce to help raise the kids or care for a sick family member. This impacted everything from their future social security benefits to 401K or pension plans.
Hispanics as well as blacks have also been hit much harder as well. The 2016 poverty rate for Hispanics is about 4 times higher than for whites and the rate for blacks is about twice as high. This increased rate for minorities is not only for senior citizens but it is also true of minority groups at all age levels; there are more blacks and Hispanics living in poverty at all age levels.
The solutions are not easy. Another separate survey from Pew Research Center shows that about 19% of senior citizens are still working, and this is up from the12.8% range in 2000. While holding down a job at any age can be great for the mind and keeping people engaged in their community, as you get older the fact is your health may fail, thus preventing the ability to work. So a senior citizen can’t just rely on finding employment as they continue to age.
Pensions can’t be relied on either. In fact, according to AARP, only about 25% of employers offer a pension to retirees that do not have a college degree. So the older generation, in which the educational level is much less than today’s generation, will rarely be able to rely on a pension.
Many seniors continue to rely on social security as a major source of income. While this has been mostly stable up through 2016, this is no guarantees that this safety net program can continue to pay out benefits as the same rates that it has in the past. So this can also be challenging.
For those 9 percent or so of seniors living in poverty, they often need to take many steps to getting back on track. It may include a part time job, depending on friends or family for support, and also using some of the charities or non-profits that provide them with free services for their everyday needs, such as food pantries and the like. We also strongly recommend talking to a professional (such as from AARP or a credit counselor) for additional tips for how to get back on track.
Since health care costs are also a big contributor to why 9% of seniors are in poverty, we always recommend to explore the various discounts and other benefits out there. For example, be sure you apply for Medicare or use a prescription drug savings card. Or even try a clinic for your medical needs rather than always going to a more expensive general practitioner or hospital. Taking small steps like this may help further reduce the poverty levels throughout the balance of 2016 and subsequent years.