Majority Of Retirees Would Raid Savings Or Borrow For Financial Emergencies Says New Poll By The Senior Citizens League (TSCL)
Alexandria, VA: A majority of Social Security recipients would have to raid retirement savings or use a line of credit to meet even relatively modest financial emergencies, according to a new poll by The Senior Citizens League (TSCL). When retirees were asked how they would raise $3,000, 49 percent of respondents said they would take money from savings and another 30 percent said they would use a line of credit or borrow.
"Even one year of high health costs, like being hospitalized for surgery, could force most seniors to spend through their savings faster, or go into debt," says TSCL Chairman, Ed Cates. "Most retirees are dealing with fragile fiscal safety nets," he says. "What makes this finding so significant is that most Medicare health plans have annual out-of-pocket maximums that exceed $3,000," Cates adds.
The poll raises questions about both the adequacy of Social Security benefits, and proposals that would make seniors pay an even bigger share of their healthcare costs in the future. According to the Social Security Administration, the median income for retirees aged 65 and older is just $28,056.[1] In 2010, the most recent year for which data is available, Medicare beneficiaries spent $4,734 on out-of-pocket costs on average, including premiums for Medicare and other supplemental insurance or health plans.[2]
Yet in deficit reduction negotiations over the past two years, both President Obama and Congressional budget negotiators proposed cutting the growth in annual cost–of–living adjustments (COLAs) and several Medicare measures that would increase beneficiaries' out-of-pocket costs, like higher deductibles, and new co-pays, over the same time. "Making beneficiaries pay more for their Medicare, with less income, simply isn't feasible for a large percentage of today's older Americans," says Cates. "TSCL believes that Congressional candidates could face pushback from concerned senior voters in upcoming elections," he adds.
TSCL believes that more focus needs to be placed on benefit adequacy as people spend more years in retirement. TSCL supports measures to strengthen Social Security that would increase the taxable maximum, ensuring that high wage earners pay their fair share. In addition, TSCL believes more can be done to protect Medicare from fraud and wasteful duplication of tests and services.
What do you know about the fastest rising expenses in retirement? Take this quiz at www.SeniorsLeague.org.
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With about 1 million supporters, The Senior Citizens League is one of the nation's largest nonpartisan seniors groups. Located just outside Washington, D.C., its mission is to promote and assist members and supporters, to educate and alert senior citizens about their rights and freedoms as U.S. Citizens, and to protect and defend the benefits senior citizens have earned and paid for. The Senior Citizens League is a proud affiliate of TREA The Enlisted Association. Please visit www.SeniorsLeague.org or call 1-800-333-8725 for more information.
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[1] Income of the Aged Chartbook, 2012, April 2014.
[2] “How Much Is Enough? Out-of-Pocket Spending Among Medicare Beneficiaries: A Chartbook,” Kaiser Family Foundation, July 2014.
