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There is a world of reality beyond the HD community.
The Census Bureau reports that poverty among adults at least 65 years old rose in 2024 from the prior year. The poverty rate rose from 14.2% to 15%, the highest level among all age groups.
The 2026 COLA is projected between 2.7 and 2.9% (even though there is no inflation🙄) while the Medicare Part B premium is projected to increase $21.50 plus higher Part D premiums and higher supplemental coverage premiums. Lower income seniors may find themselves going backwards.
The reality is that if you are low income all your life, you are not likely to be better off in retirement. There are just some people, perhaps those up to the 20th percentile of income, who can’t save for retirement. The current poverty level for a family of two is $21,150 ($1762.50 mo). Two years ago 20% of American households earned less than $33,000.
Even though some seniors may be eligible for subsidies such as SNAP, that may not help the the near poor. In NJ the net income limit is $1,704 per month for two people plus there are liquid asset limits as well. Gross income can be higher as the cost of housing can be deducted to reach net income.
There are several programs to help low income with Medicare premiums and deductibles, but they vary by state.
Some seniors are dual eligible, that is, they have both Medicaid and Medicare. In NJ the income limit for a single person is $1,305 per month. This program is for those who need help with daily living activities but do not require a nursing home level of care. There is also a liquid asset limit of $4,000.
Two things that I find unfair. First, there are so many differences in how low income people are helped based only on where they live. Second, the complexity and differences in qualifying for different programs providing assistance to essentially the same population – in this case seniors 65 and up.
Being poor is no fun, being poor, even low income in retirement is less funner😢 There is a lesson for those with resources to save for retirement- get to it now and never stop.
Dick, thanks for offering a perspective a little broader than what many of us are regularly exposed to.
We live in a low socio-economic area (10 years older than state median, $10,000 less annual income than state median). This has been a constant reminder that whilst many have managed to build themselves a solid financial base, many others will really struggle to reach that target. When there is little or no gap between income and necessary expenses, saving is tough.
Oh Sir Richard, If only the youngsters starting out would LISTEN and ACT APPROPRIATELY. I certainly thank you for your writings. 😉
I grew up in a family that had lived through the Depression and WWII, and the efforts they made to scrimp and get by were passed down. My wife and I have been determined savers our whole lives and are secure in our retirement. Our biggest problem is spending what we have while we are living and what to do with the rest when we are gone.
Our savings efforts were successful in part because of determination, but more importantly because we also had the means to save. For too many families, good savings habits won’t necessarily help much if the amount of their income is insufficient. This is in part an income and spending problem, but it is exacerbated by the lack employer retirement savings plans, especially in small businesses, that would help more people better prepare for their retirement years.
Dick, my comment is a bit off topic, but your post reminded me of something.
Six or seven years ago, Amazon built a huge distribution in the area. A tax client of mine complained that Amazon, with a starting pay of $15/hour, was stealing employees from other employers. I was nearly speechless, but managed to ask if he could get by on $30K per year. You see, I had just completed his tax return; he earned $350K that year.
Yes Mr. Smith if that job is not part time work would they earn even that much.
On top of that, I’m told the working conditions inside the centers are pretty intense.
I agree and a recent article about seniors living in dilapidated homes they own but can not afford to fix in Philadelphia and other major cities makes your point very clear.
…”society makes it more difficult”. Makes what more difficult?
Makes it more difficult to obtain support when needed by having complicated rules and inconsistent benefits and based on where a person lives. I think if you are poor, you should not be better or worse able to cope because you live in Texas or Massachusetts or Florida.
if you accept that many of lowest income are likely the lowest educated perhaps below average in many respects, then dealing with the complexity of support services is a barrier. More difficult than necessary.
My socio-economic origin was very much in the lower percentile of the income curve. Because of this, I still have friendships and nodding acquaintances with many still within this economic group. One thing I can say with certainty is, if you want to navigate and play the system around social support systems, people I know can give you a masterclass on how to manipulate these systems for maximum benefit. The knowledge and street smarts is truly impressive.
In my time selling beer in a very poor part of town, I came to know many residents, and I could not agree more that some of those people were very smart.
Too bad they don’t put that skill to more productive use.
Talking with a few of them over the years, I’ve always thought they would make great systems analysts, with the ability they have to understand, link, and optimize the complexity in Byzantine systems.