Economy

Why Older Americans Are Plunging into Poverty

For Roberta Gordon, retirement is an impossible dream. At 76, she works for $50 a day at a grocery store in Corona, California. Over the years, she’s worked at many jobs that didn’t provide pension benefits. Some employers didn’t even pay into Social Security, leaving her with only $915 per month in benefits. Now that her roommate has died, her monthly rent went up to $1,040. She has run up credit card debt and sometimes gets her meals from food banks.

Seniors in Poverty: Roberta Gordon is the human face of two sobering statistics. Among Americans who are 65 or older, 12.4 percent are still in the workforce, up from three percent in 2000. Additionally, between 2015 and 2016, the share of Americans over 65 who are living in poverty rose by 14.5 percent—in just one year!

Post-Pension America: Retirees used to count on a “three-legged stool”: pensions, savings, and Social Security. However, many private-sector employers have switched from “defined benefit” plans, with guaranteed benefits, to “defined contribution plans,” shifting investment risks to workers. With stagnant wages, workers have a hard time saving.

Counting on Social Security: Many retirees count on Social Security as a major portion of their retirement income. Women get an average of $4,500 less in annual benefits than men, which is attributable to factors such as making less money than their male counterparts (and therefore making smaller Social Security contributions) and taking time to care for children and aging parents. Now, with millions more Baby Boomers getting ready to retire, President Trump and congressional Republicans are threatening to cut money from the program to pay for $1.5 trillion in tax cuts for the rich and large companies.

Categories: Economy, Social Security