Poverty and Aging in America
Profiles of the Low-Income Older Population
In July 2008, the AARP Foundation convened a symposium on poverty and aging in America. This marked our new initiative to open a dialogue about the hardships that affect older people living in poverty. To coincide with the symposium, we released the Foundation’s first annual chart book A Profile of the Low-Income Older Population. This chart book presents key economic and social indicators through an “aging lens” to examine the special challenges around financial security for older Americans.
OverviewThe state of the economy is a top of mind issue for the low-income, and for older persons, it is especially critical. Data shows that the poverty rate for older persons in the United States has remained at 9 to 11 percent for the past decade. The total poverty rate however obscures wide variations by sex, race, and living arrangement. To illustrate, women aged 65 and older had a poverty rate of 11.5 percent in 2006 compared to 6.6 percent for men in the same age group. Similarly, the poverty rate for older Whites was 7 percent and for older African-Americans, 22.7 percent.
A Profile of the Low-Income Older Population chart book shows that a focus on poverty rates alone overlooks the large number of near-poor older persons at risk of falling into poverty. Often the most vulnerable segment of this population, women, minorities and people living alone are at the greatest risk; the death of a spouse, unexpected health care expenses, and rising utility costs, for example can catapult a person into severe financial distress. Key findings from the chart book A Profile of the Low-Income Older Population are below.
Principal Findings
- 6 in 10 older persons in poverty or at risk of falling into poverty are women.
- Among persons age 50 to 64 living in poverty, only one quarter are in the workforce compared to over three quarters of people in this age group with incomes at or above twice the poverty level.
- About 16 percent of persons age 50 to 64 who are living in poverty report they are unemployed but looking for work.
- The poverty rate for persons age 65 and over would have increased from 9.4 percent to 44.9 percent in 2006 without Social Security.
- Older persons living in poverty are unlikely to receive retirement income from a traditional pension, 401(k) or similar plan.
- Only 64.7 percent of persons age 50 to 64 who are living in poverty have health insurance coverage (public or private).
- Older persons living below the poverty line rely heavily on public benefits such as Medicaid, Supplemental Security Income, public housing and food stamps, particularly among the group age 50 to 64.
- Half of households age 50 to 64 living in poverty and nearly two-thirds of households age 50 to 64 at-risk of poverty own homes. A majority of these homeowners have problems meeting ownership related expenses.
- The median net worth of families age 50 and older living in poverty is just $10,000.
- Total median financial assets of families age 50 and older living in poverty are less than $1,000.
- Over one-third of families age 50 and older living in poverty do not have a checking account compared to only 3 percent in this age group with incomes at or above twice poverty.
- Almost 1 in 5 families age 50 and older living in poverty have debt payments in excess of 40 percent of total income.
- Persons age 50 and older living in poverty are almost 4 times as likely as those living at twice the poverty level to categorize their health as poor rather than excellent and almost one-quarter said they could not see a doctor in the last 12 months because of cost.
Poverty is not a statistic – it is personal. It affects real people who live, hope and dream. Women, minorities, and persons living alone are at the greatest risk of poverty. The findings reported in this chart book highlight the critical role public programs, like Social Security and Medicare have in preventing poverty among those at risk and mitigating the effects of poverty for those currently living in poverty. Until we understand the true scope of poverty and near poverty, we cannot create the strategies to combat what seems like an intractable problem. A Profile of the Low-Income Older Population chart book and additional resources related to economic security and the older population are available online. Visit www.aarp.org/foundation to download this 2008 chart book of key indicators.
