Many older Americans are experiencing an increasing difficult time in retirement and many more are likely to experience economic hardship over the next two decades. The main reasons for this steadily emerging retirement security crisis is that both private pensions and social security have failed to keep up with living expenses in retirement. Health care costs are outstripping coverages provided through private insurance and Medicare. These articles address the sources of this emerging crisis.
“I’m going to work until I die, if I can, because I need the money,” said Dever, 74, who drove 1,400 miles to this Maine campground from his home in Indiana to take a temporary job that pays $10 an hour.
Dever shifted gently in the tractor seat, a rubber cushion carefully positioned to ease the bursitis in his hip — a snapshot of the new reality of old age in America.
People are living longer, more expensive lives, often without much of a safety net. As a result, record numbers of Americans older than 65 are working — now nearly 1 in 5. That proportion has risen steadily over the past decade, and at a far faster rate than any other age group. Today, 9 million senior citizens work, compared with 4 million in 2000.
While some work by choice rather than need, millions of others are entering their golden years with alarmingly fragile finances. Fundamental changes in the U.S. retirement system have shifted responsibility for saving from the employer to the worker, exacerbating the nation’s rich-poor divide. Two recent recessions devastated personal savings. And at a time when 10,000 baby boomers are turning 65 every day, Social Security benefits have lost about a third of their purchasing power since 2000.
– The Washington Post
Social Security beneficiaries have lost nearly one – third of their buying power since 2000, according to the 2017 Social Security Loss of Buying Power Study released today by The Senior Citizens League (TSCL). “The findings represent a big loss of 7 percent in buying power, from 23% in 2016 to 30% over the past 12 months. This occurred as inflation has begun to climb, but people receiving Social Security received an annual cost – of – living adjustment (COLA) of just 0.3 percent for 2017,” says TSCL’s Social Security policy analyst and the study’s author, Mary Johnson. Housing and medical costs —particularly for prescription drug expenses — were among the most rapidly – rising spending categories over the past year.
The study’s findings illustrate the impact on the buying power of Social Security benefits when the economy goes from a period of extremely low inflation to more typical rates of inflation. The last time there was a loss in buying power this big was in 2011, another year similar to 2017, when there was no COLA, but inflation spiked. The following year in 2012 Social Security benefits increased by 3.6 percent. Based on consumer price index (CPI) data through April of this year, Johnson estimates that the COLA for 2018 may indeed be significantly higher than in recent years —around 2.1 percent — but that number could change since there are still several months to go before all the data is in.
– Senior Citizens League