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Editorial: The challenges of living on a fixed income


An editorial from the Rutland Herald:

Research was published this week that shows how difficult it is for New England seniors to live on a fixed income. According to the Kaiser Family Foundation, more than half of older women living alone — 54% — are in an equally precarious financial situation: either poor by federal poverty standards or with incomes too low to pay for essential expenses. For single men, the share is lower, but still surprising — 45%.

That’s according to a valuable but little-known measure of the cost of living for older adults: the Elder Index, developed by researchers at the Institute of Gerontology at the University of Massachusetts Boston.

According to KFF, the Equity in Aging Collaborative plans to use the index to influence policies that affect older adults, such as property tax relief and expanded eligibility for assistance programs. medical expenses. Twenty-five significant aging organizations are members of the collaboration.

The goal is to fuel a robust dialogue about “the true cost of aging in America,” which remains unrecognized, said Ramsey Alwin, president and CEO of the National Council on Aging, a coalition organizer. Nationally and for every state and county in the United States, the Elder Index uses various public databases to calculate the cost of health care, housing, food, transportation and miscellaneous expenses for elderly, according to KFF. It represents a minimum budget, adjusted according to whether the elderly live alone or as a couple; whether they are in poor, good or excellent health; and whether they are tenants or owners, with or without a mortgage.

The results of the analyzes are revealing.

According to the report, in 2020, according to data provided by Jan Mutchler, director of the Institute of Gerontology, the index shows that almost 5 million elderly women living alone, 2 million elderly men living alone and more than 2 million elderly couples had incomes that made them economically precarious.

And those estimates took place before inflation soared to over 9% and older people continued to lose their jobs in the second and third years of the pandemic.

Nationally and in every state, the minimum cost of living for seniors calculated by the Elder Index far exceeds the federal poverty lines, which are used to calculate official poverty statistics.

According to the KFF report, the Elder Index estimates that a healthy, single older adult paying rent needed $27,096, on average, for basic expenses in 2021, or $14,100 above the threshold. federal poverty of $12,996. For couples, the gap between the calculation of the need index and the poverty line is even greater.

Yet eligibility for Medicaid, food stamps, housing assistance, and other safety net programs that help seniors is based on federal poverty standards, which don’t account for geographic variations. the cost of living or medical expenses incurred by the elderly, among other factors. , KFF reports.

According to Kaiser Health News, in April, researchers at the University of Massachusetts showed that Social Security benefits only cover a fraction of what seniors need for basic expenses: 68% for a senior in good health who lives alone and pays rent and 81% for an older couple in the same situation. “There’s a myth that Social Security and Medicare miraculously takes care of all the needs of the elderly,” Alwin told Kaiser Health News. “The reality is that they don’t, and far too many people are at a crisis point of economic insecurity.”

But now we face an even bigger challenge: inflation. The cost of basic necessities and fuel is at its highest in 40 years.

At the end of its last policy meeting on Wednesday, the Federal Reserve should impose a second consecutive increase of three quarters of a point, raising its key rate to a range of 2.25% to 2.5%. It will be his fourth rate hike since March, when he announced a quarter-point hike. Since then, as inflation hit new four-decade highs, the central bank has tightened credit even more aggressively.

According The Associated PressSince the Fed met in June, the government has reported inflation accelerating to an annual rate of 9.1%, the most since 1981. Although the jump reflects a surge in oil prices gasoline, which have since declined, inflation worsened even after excluding the volatile energy and food categories.

The effects are harsh for all Americans, but especially for older Americans. In a state like Vermont, where the population is aging, this is something that is taking a toll – and perhaps a bigger one than we even know.