The Elder Economic Security Standard Index, or Elder Index, was developed by the Gerontology Institute at the University of Massachusetts Boston. It measures the cost of housing, health care, transportation, food and other essentials against the income of older adults in the United States.
This year, the findings included the following:
- More than half of older women living alone – 54% -- live in poverty or have incomes too low to cover their essential expenses
- 5 million older women living alone, 2 million older men living alone, and 2 million older couples have incomes that make them economically insecure
- In New Jersey, 54% of seniors are economically insecure1
Even more concerning, this data was collected prior to the hard-hitting inflation of recent months – when the Consumer Price Index (CPI), climbed 8.5% over the previous year. 2
Retirees have something else to consider: they are subject to a higher rate of inflation than the average consumer. Why might this be the case? Healthcare inflation has outstripped CPI inflation by as much as 3% in recent years. Retirees may expect to spend nearly $300,000 to cover medical costs in retirement.3
For those depending on their Social Security benefit to carry the brunt of their expenses, they may be in for a shock. In April, Elder Index researchers showed that Social Security benefits cover only a fraction of what older adults need for basic living expenses: 68% for a senior in good health who lives alone and pays rent and 81% for an older couple in the same situation.4
When it comes to envisioning your retirement, it helps to have a professional on your side to help guide the way. With over 40 years of financial planning experience, M Financial recognizes that each of our clients has a unique set of financial goals, and we strive to help them work towards them. If you have concerns about your particular situation, or if you’re looking for a second opinion, please feel free to call us at 856-810-7701.
- https://elderindex.org/ (2021)
- YCharts.com, 2022; USInflationCalculator.com, 2022
- Fidelity Retiree Health Care Cost Estimate, 2021
- https://www.benefitspro.com/, “Elder Index Shows Many Seniors Can’t Afford Basic Necessities”, July 27, 2022