For the last five decades poverty among those age 65 or older has been on the decline with a 2/3 drop in the rate from 1970 until 2015. However, those gains came at a time when the elder population was small, Social Security faced no worries about funding, and private pensions were common which are all circumstances that have changed. Today, very few people have savings that meet the recommended minimum to fund retirement and are instead planning to rely on social security and/or work past retirement age and are without a pension to provide additional income. But social security will not provide much more than %50 of earnings in the best of circumstances with many workers receiving %45 or less of average lifetime wage due to gaps in employment and only %14 of those past retirement age work past age 66. Due to the rising cost of medical care many eventual retirees may face a double whammy of a huge income drop combined with significant out of pocket expenses for necessities like prescription drugs which could push many into poverty. The most direct solution of increased funding for retirement benefits if also the most unlikely as the majority of the public balks at additional taxes which would be required while other solutions, such as increased education about the needs of retirement, likely being too late to help those most in danger. But, in the end, there will be no one solution to preventing a spike in poverty among the elderly but will require a grab bag of approaches by the government and retirees personally as long as the will exist to make the adaptions that are needed.
See Eduardo Porter, An Aging Society Changes the Story on Poverty for Retirees, The New York Times, December 22, 2015.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.
