Affordability Standard Established for Vermont Elders

While Vermont is well known for its quality of life, its pastoral beauty and maple syrup, few know that it is among the most expensive states in the nation for older residents. A new study released by AARP Vermont today details the costs for elders to meet the basic needs of living here, and establishes an affordability baseline called the Elder Economic Security Standard (EESS). Similar to the process of setting a livable wage calculation for Vermont workers, this data highlights the heavy economic burden on older residents (retired residents over age 65), many of whom live on very modest fixed incomes. It factors in the costs of housing, food, transportation, health care, and a host of miscellaneous expenses such as furniture, clothing, telephone and household supplies, etc.
 
"This standard provides a baseline for policymakers, state agencies and government officials as they look at programs that support this population," said Greg Marchildon, AARP state director. "The most glaring finding here is the huge gap between the Vermont EESS and the federal poverty level used to determine eligibility for a host of state and federal assistance programs. The current poverty levels are clearly outdated and do not reflect the reality of today's cost of living."
 
For example, to meet their basic needs, a couple over age 65 with a mortgage needs nearly triple the $13,014 poverty level as established by the U.S. Department of Health and Human Services. A couple without a mortgage still needs $28,505 a year to meet their basic needs—more than twice the federal poverty level—according to the EESS research. The EESS for an individual (without a mortgage) is $21,058—the highest of any state for which similar data is available.
 
Other measures point out the large segments of the over 65 population living at or below the edge of poverty. In recognition of this, eligibility for many public assistance programs is set at multiples of the poverty threshold (i.e., 150%, 200%, etc.). So it is disturbing to learn that: a.) 18% of married couples 65+ earn less than $15,000; b.) 27% of households 65-74 are below 200% of poverty; and c.) 40% of households 75+ have incomes below 200% of poverty.
 
Given well-known increases in costs over the years, it is not surprising that so many older Vermonters are now struggling. Since 2002, the cumulative cost of living adjustment for Social Security was 17%. During that same period, rents grew by 32%, heating oil 113%, natural gas 89%, and gasoline 26% (this includes the recent decline in some prices).
 
As evident below, the costs for just the most basic needs are substantial and these calculations are made on a conservative basis.

The research was conducted by Doug Hoffer, a Vermont economic and policy analyst based in Burlington.

Find a copy of the report and more comparative data online or contact Dave Reville at AARP Vermont at 802-951-1303 or dreville@aarp.org.