While the overall poverty rate in the United States fell last year alongside a record high in household income, Americans aged 65 and older represent a stark exception to this trend. According to a newly released US Census Bureau report and an analysis by the AARP Foundation, poverty among seniors has risen for the fifth consecutive year. The rate has jumped approximately 45% since 2019, making it the highest among any age group and translating to 10 million seniors currently living in poverty, up from 5.1 million seven years ago.
Claire Casey, president of the AARP Foundation, described the trend as alarming, noting that no other age group has experienced a similar pattern. The issue is particularly acute for women, with the poverty level for women over 65 approaching 17%. Casey highlighted the financial reality for a single renter, where the poverty line begins at just over $19,000 annually, making it difficult to cover essential costs such as rent, groceries, utilities, and healthcare.
Experts indicate that this financial strain often begins well before retirement. Dan Doonan, executive director of the National Institute on Retirement Security, explained that women often reach retirement after a lifetime of lower earnings and fewer opportunities to save. He emphasized that poverty in later life is frequently the result of accumulated risks rather than poor decision-making. More than 7 million people in their 50s and early 60s are already living in poverty, challenging the common perception that the 50s are peak earning years.
Structural barriers to saving exacerbate the crisis. AARP Foundation data shows that only one in four low-income older adults has access to a workplace retirement savings plan. Furthermore, nearly half of Americans report having less than $100,000 saved for retirement, with nearly two in ten having no savings at all. For a low-wage worker retiring at 65, Social Security benefits amount to just over $15,000 annually, which falls below the federal poverty line for a single adult.
Current economic conditions, including elevated inflation and soaring gas prices, have further strained the finances of struggling seniors. AARP research indicates that one-third of low-income older adults could not cover an emergency expense of $100 from savings, a figure that has risen from 28% in the spring. More than half of this demographic could not cover a $500 emergency. Consequently, nearly two-thirds of employed older adults with low incomes report holding at least one additional job beyond their main source of paid work.
“We have been building toward this retirement crisis for decades,” said Teresa Ghilarducci, a labor economist at the New School in New York City. “More and more elders don't have traditional pensions, and their 401(k) balances are nonexistent or too small to matter.”
The data underscores a growing reliance on Social Security and multiple jobs to make ends meet, as many seniors face a future where working a lifetime and managing finances responsibly is not enough to prevent aging into poverty.
<small>Source: Yahoo News — read the original story there.</small>
