A relatively little-known measure of the cost of living of older Americans — the Elder Index developed by researchers at the Gerontology Institute of Massachusetts-Boston — recently made news after researchers found that the average Social Security benefit covered just 68% of basic living expenses of housing, food, transportation and healthcare for a single person who rents, and 81% for an older couple in 2021. “The gap between Social Security benefits and what it takes to get by is especially problematic for older adults who rely largely or entirely on Social Security, including nearly a quarter of adults aged 65 or older who depend on Social Security for 90% or more of their family income,” researchers wrote.
The online tool is easy to use and a real eye-opener. It would be useful to all sorts of people — from those close to retirement who are still in the planning stages, to those already living in retirement, who need help with annual budgeting, to senior advocates and older activists who wish to influence lawmakers about legislation that addresses the adequacy of Social Security and income-related benefits.
The Elder Index is a county-by-county measure of the income needed by older adults to maintain independence and meet their daily living costs while staying in their own homes. It uses various public databases to calculate housing, food, healthcare, transportation, and other expenses to provide customized information. The findings are based on state and county, whether one rents or owns a home, with or without a mortgage. One caution: the findings, when using this tool, may tend to estimate on the low side. The results are based on estimates in 2021 — before inflation as measured by the CPI-W (the same index used to calculate the annual cost-of-living-adjustment) grew by 9.8% in June of 2022.
Researchers Jan E. Mutchler and Nidya Velasco Roldan note that “many older adults do not have other sources of income to supplement their Social Security benefits.” In addition, they note that “Continuing or returning to work for pay later in life is an important strategy for building retirement security when possible….”
In fact, about 26.6% of adults ages 65-74 participated in the workforce in 2020, and 8.9% of people aged 75 and older were still working, at least part time, according to civilian labor force data from the Bureau of Labor Statistics. While TSCL is still researching the data on adults who left the workforce in 2020 and 2021 due to the pandemic, recent TSCL surveys indicate that almost 10% of survey participants report they have returned to the workforce or are looking for a job.
Please let us know how you are faring in retirement, by taking TSCL’s 2022 Retirement Survey.
How Confident Are You About Social Security? Most Aren’t.
When TSCL asked participants in our new Senior Priority Plan, “How confident are you about the adequacy of Social Security benefits to support you through your entire retirement?” only 6% of survey respondents said, “very confident.” Here’s how everyone else answered:
- 38% — OK for now, but not confident about the future. Don’t have a lot of savings, worried about healthcare, food, and housing costs.
- 50% — Not at all confident. Depend on Social Security benefits for most, or all of income. (I am) falling behind, going into debt and sometimes need help with food, prescription drugs and other rising costs.
- 6% — Uncertain.
Sources: “Social Security Benefits Continue To Fall Short Of Covering Cost of Basic Needs For Older Americans, 2021,” Jan E. Mutchler and Nidya Velasco Roldan, Gerontology Institute, University of Massachusetts — Boston.
