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The truth about 'greedy' seniors and the 'war' between generations


The reality about ‘grasping’ seniors and the ‘warfare’ between generations

CHICAGO (Reuters) – Former U.S. senator Alan Simpson summarized the argument effectively: seniors preventing Social Security profit cuts had been nothing greater than “greedy geezers” stealing from younger individuals “who are going to get gutted.” The Wyoming Republican’s memorable phrase from 2012 is an efficient instance of the colourful language of so-called intergenerational warfare – pitting generations in opposition to each other with zero-sum-game financial arguments.

FILE PHOTO: Fishermen collect on a mooring throughout sundown in Yevpatoriya, Crimea October 23, 2019. REUTERS/Alexey Pavlishak//File Photo

That sort of rhetoric may be helpful for some politicians, however it’s financial nonsense. Families don’t reside in financial silos, separated from each other, and a few current proof reveals that a big section of the senior inhabitants is something however grasping. In reality, they’re struggling to satisfy primary dwelling bills – and the financial ache additionally impacts youthful members of the family.

Consider the outcomes of a current survey by AARP. (bit.ly/38hFuTn) It discovered that one-third of midlife adults with no less than one dwelling mother or father (32%) are offering monetary assist to them, often for dwelling bills reminiscent of groceries and medical prices. More than half of midlife adults (54%) offered $1,000 or extra to their dad and mom within the final 12 months; inside that group, 34% offered assist ranging as excessive as $5,000, and 13% offered assist as excessive as $10,000.

“I think some people have an image of the older generation living high on the hog, draining America’s coffers by spending their Social Security on cruises to the Bahamas,” mentioned George Mannes, senior editor of the AARP journal. “But a lot of older people are really living close to the bone.”

The AARP survey outcomes are disturbing – however actually solely trace on the variety of older households dealing with monetary stress. 

A extra detailed measure is the Elder Index, produced by the Gerontology Institute on the University of Massachusetts Boston (bit.ly/2SyIbcE). The index measures the price of dwelling for older individuals dwelling as {couples} or alone – however impartial of kids. It is constructed across the typical budgets of seniors.

“It’s very stripped down – it doesn’t include anything anyone would remotely consider unnecessary,” mentioned Jan Mutchler, a professor of gerontology on the college. That means bills like meals, housing and utilities and minimal ranges of transportation – and naturally, healthcare prices.

The index is calculated for each county within the United States, which suggests it takes under consideration regional variances in the price of dwelling.

The college not too long ago launched new knowledge for 2019, and it reveals that 50% of Americans over age 65 dwelling alone have incomes which can be under the index – in different phrases, they lack the assets to pay for his or her primary dwelling wants. For {couples} – who often profit from two Social Security checks and usually tend to produce other revenue – the comparable determine is 23%.

Those figures are surprising, and they’re much extra dire than the federal measure of poverty used to ascertain eligibility for a lot of state and federal help packages. For instance, a measure utilized by the U.S. Department of Health and Human Services outlined poverty for single individuals final 12 months at annual incomes of $12,490 and $16,910 for {couples} (bit.ly/31JuDPI). That interprets into poverty charges of 18% for singles and 5% for {couples} – a lot decrease than what the Elderly Index suggests.

These elders reside in what Mutchler calls a “gap.” “They’re not poor enough to be considered poor by the federal government, but they fall below what they need to get by and so they’re struggling.”

REMEDIES 

The greatest solution to ease this financial stress is thru strengthening our two key social insurance coverage packages. “Strengthening and stabilizing Social Security and Medicare is very important,” Mutchler mentioned. “And then, we should strengthen and expand support for the housing needs of older people.”

To which I’d add – not simply older individuals at this time. Strengthening our social insurance coverage packages will probably be much more helpful for younger individuals, who will arrive at retirement with smaller retirement accounts and far much less prone to lay declare to a conventional outlined profit pension. [nL2N27A0PP] (reut.rs/38i4cTL).

Social Security reform has been a sizzling matter on the presidential marketing campaign path this 12 months, with Democrats competing for pole place as champions of expanded advantages.

A overview of candidate positions on Social Security reform by the Center for Retirement Research at Boston College (bit.ly/2tU74r6) discovered a number of Democrats backing across-the-board profit growth, and a bigger quantity favoring will increase concentrating on susceptible seniors. The latter embrace growing Social Security’s particular minimal profit, which goals to maintain very low-income staff out of poverty in retirement; increasing Social Security advantages for caregivers; and elevating advantages for surviving spouses.

Targeted will increase get pleasure from broad bipartisan assist. A 2016 fee on retirement safety organized by the Bipartisan Policy Center (bit.ly/2vmBXok) endorsed a number of concepts of this sort.

“It’s entirely appropriate to focus on parts of the population where current benefits are inadequate,” mentioned Shai Akabas, director of financial coverage on the Bipartisan Policy Center. “People with low incomes can work a long career and still be getting benefits below the poverty line, or not very much above it. We need to make sure seniors who have worked for many years are not forced to live in poverty in retirement.”

President Donald Trump ran in 2016 opposing any cuts to Social Security advantages and pledged to “protect” Social Security in his current State of the Union tackle. But he additionally not too long ago hinted that he may push for profit cuts in a second time period in an interview with CNBC. And his 2021 funds plan, unveiled this week, accommodates an array of cuts to social insurance coverage and security web packages, together with tightened eligibility necessities for Social Security’s incapacity program. [nL1N2AA0HI] (reut.rs/2OMqXaH)

No moderator has posed a query about Social Security to candidates at any of the presidential debates thus far. Perhaps they assume it’s a matter of curiosity solely to the geezers, or the “OK boomers.”

But they’d be fallacious.

For extra on intergenerational dependence, try my podcast interview this week with Jan Mutchler of the University of Massachusetts Boston. (bit.ly/2uJ6DA2).

Reporting by Mark Miller in Chicago; Editing by Matthew Lewis

Our Standards:The Thomson Reuters Trust Principles.

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