Take a moment to imagine retirement.
Now imagine a retirement with no travel, no restaurant meals, no savings, no entertainment and not being able to buy gifts or make large purchases.
Even before the COVID-19 pandemic, we had heard plenty about a “retirement crisis.” Over the next 30 years, the share of the U.S. population age 65 and older will increase from about 15% to almost 22%, according to the Congressional Budget Office. Will retirees have enough money to make it?
A year into the pandemic, many older Americans were pushed out of the workforce by the combined health crisis and economic downturn and were forced to retire earlier than planned, AARP reports. These early retirees risk long-term financial insecurity because of lower-than-anticipated savings and payouts from pensions, Social Security and other sources, AARP says.
To make things worse, the consumer price index, which measures the cost of food, housing, gas, utilities and other goods, was estimated to have risen 5% in May compared with last year.
Many older adults have limited income and modest savings. In 2016, half of all people on Medicare had income less than $26,200 per person, and 25% had incomes below $15,250, according to the Kaiser Family Foundation.
But older people are worse off in some places than in others. A research report by U Mass Boston estimates that living expenses are so high in many metropolitan areas across the U.S. that many older singles and couples lack the resources needed to get by in their communities. The report is based on the Elder Index created by U Mass Boston’s Center for Social and Demographic Research on Aging. The Elder Index is a tool that gauges the economic security of older Americans.
“Getting by” refers to being able to cover expenses including housing, food, transportation, health care, and basic household items including clothing, a telephone, hygiene items and cleaning supplies.
The report, written by Jan Mutchler and Yang Li, focuses on the 100 largest metropolitan areas in the U.S, and compares the 2020 Elder Index to household incomes among adults aged 65 or older living in one- and two-person households.
The researchers found that in each of the 100 largest metro areas, at least 37% of older singles are at risk of being unable to afford basic needs and age in their own homes, along with at least 12% of older couples. But rates of economic insecurity are far higher in some locations, reaching 60% or greater for singles and more than 40% for couples in some metros.
The Elder Index is a basic budget that excludes vacations, restaurant meals, savings, large purchases, gifts and entertainment. This list shows the 15 metropolitan areas with the highest percentage of older Americans with incomes below the elder index, followed by the cities with the fewest older people living below the index. But the cities where more older people are scraping by are not all the expensive ones you might expect.
These are the cities with the highest and lowest percentage of economically insecure older people, according to the research report by U Mass Boston.