“The Golden Years” have turned into a dark state of uncertainty for older Americans.
Sharply rising inflation has hit seniors particularly hard, reducing the quality of life for many. From cutting down on expenses, to rising poverty, to postponing retirement—life for seniors is becoming exceedingly difficult.
Laid off two years ago and living on a fixed income, 66-year-old Susan DeFrance says inflation and her expenses keep her up at night. “Milk has gone up like $2 a gallon... and gasoline" keeps rising, DeFrance tells NPR. As a result, she’s had to sell her home and move into a mobile home.
Retired teacher Leslie Morgan, living on Social Security and a $3,000 per month pension in Asheville, N.C., strikes a similar tone, telling The Washington Post, “Just surviving day-to-day has become a big concern of mine.”
Their stories are just two of millions across America.
Homelessness, Delayed Retirement
Americans aged 65 and older are slightly more likely to be living below the poverty line than working-age Americans, per the U.S. Census (9.5% of those 65 and older, compared to 8.8% of those 18-64).
For the Americans who are saving with a retirement account, the outlook is similarly grim, as a majority of Baby Boomers, 56%, “feel behind schedule” on their savings, according to a recent Bankrate survey. In fact, 13% percent of Baby Boomers are now saving less for retirement than they were before the pandemic.
“Sudden increases in prices, like the ones we’ve experienced with gas, food and housing, will erode the purchasing power of those on fixed incomes until those benefits get adjusted.”
— Gary Engelhardt, economics professor, Syracuse University
Homelessness is expected to increase among seniors, partially due to rising housing prices. In the next 10 years, homelessness among seniors is forecasted to triple, with University of Pennsylvania researchers projecting the number of homeless seniors in New York City, for instance, to more than double from 2,600 in 2017 to 6,900 by 2030.
Inflation is also causing major difficulties for seniors who rent, as opposed to own a home. Hayla Sanchez-Warren, the Denver-based director of the Area Agency on Aging, says, “One of the biggest challenges we're facing right now is homeless, older adults or those [who] are about to be homeless… They worked really hard their whole life, but now rent is $1,600 and their retirement is $1,000.”
Even those who are gainfully employed are negatively impacted by inflation. For older workers in the Gen X and Baby Boomer generations, 13% are considering delaying their retirement because of inflation, according to the Nationwide Retirement Institute. Fifty-eight percent say inflation is reducing their purchasing power.
‘Erosion of Purchasing Power’
Gary Engelhardt, an economics professor at Syracuse University, talked about declining purchasing power with The Washington Post. “The sting of rising prices for older Americans is real,” he said. “Sudden increases in prices, like the ones we’ve experienced with gas, food and housing, will erode the purchasing power of those on fixed incomes until those benefits get adjusted.”
The rising inflation across the country, which is at its highest rate since 1982, is also causing many retired seniors to re-join the workforce.
With concerns over the rising cost of living in 2021 jumping to 25%, up from 8% the previous year, many Americans are re-entering the workforce out of necessity, according to an Allianz Life Insurance report. Jennifer Schramm, senior strategic policy advisor at AARP, tells Yahoo Money, “Financial need is likely the driver for working at older ages. Retirees with lower savings may be the most likely to seek to re-enter the labor force.”
Supermarket Sticker Shock
One of the most sobering ways inflation is harming seniors is at the grocery store.
Sadly, reports coming in are not too far off from the half-serious joke about being reduced to eating cat food in retirement.
Morgan, the North Carolina retiree introduced in the beginning of this story is, in fact, cutting back on what she buys at the grocer.
“She rarely buys meat anymore, and when she does, it’s canned chicken or a marked-down package of shrimp that she stretches into a week’s worth of stir-fry meals,” The Washington Post reports.
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