Seniors feeling pinch of insufficient income

Seniors feeling pinch of insufficient income

Postby DDEATH » Sun Mar 25, 2012 10:40 am

Seniors feeling pinch of insufficient income
By Janet Kidd Stewart, special to Tribune Newspapers

March 23, 2012
A pair of recent studies reveals a stark contrast in the race to retirement.

Fidelity Investments said the average total balance for its 700,000 customers ages 65 to 69 with both a 401(k) and an IRA at the firm is $359,000.

Meanwhile, more than half of U.S. households headed by someone over 65 have incomes that don't cover basic living expenses, according to a study by Wider Opportunities for Women, a Washington, D.C., nonprofit group.

The group and the Gerontology Institute at the University of Massachusetts at Boston recently published an index that compares living costs and income by state for elder households. In every state, the median income fell short of basic local housing, food, transportation, personal items and health care costs.

Massachusetts and New York were among states with the biggest disparity between income and costs. Michigan, Utah, Montana and Alaska had the smallest.

"It's becoming more and more difficult to afford basic expenses when you are living your retirement years," said Donna Addkison, president of Wider Opportunities for Women.

Of course, even those with six-figure retirement accounts in their 60s can end up having financial troubles as they age, particularly if they still hold big mortgages or incur lots of medical expenses.

In fact, requests for Fidelity's one-on-one retirement planning guidance surged 48 percent between 2008 and 2011, company officials said.

"The economic downturn of the last several years, combined with an aging working population, has resulted in greater, more complex needs on the part of our 401(k) participants," said James M. MacDonald, president, workplace investing, for Fidelity Investments.

But for retirees with few assets beyond Social Security income, the consequences can be dire.

At 75, Virginia Hampton is working about 15 hours per week at a clerical job with the Stoddard County Public Health Center in Bloomfield, Mo. The $7.25-per-hour job is funded through the Senior Community Service Employment Program, an outgrowth of the Older Americans Act, but the program lost half its funding last summer, and its future is uncertain.

Hampton held several clerical jobs earlier in her career, but she said finding a job at her age without the assistance of the federal program would be impossible.

She lives on her paychecks and survivor benefits from Social Security. Her husband died in 1995.

"Right now, with a job, I'm able to make ends meet," she said. "When it comes to thinking of a big purchase, that worries me. I'm going to have to have a new roof sometime soon, and a new furnace because this one is 20 years old now."

Her remaining nest egg, a small IRA, wouldn't cover the costs of those projects, she said, so she's looking into home equity.

Meanwhile, she has felt the pinch of higher gasoline costs, and her Medicare plan now costs $170 a month. Her one entertainment outlet: weekly bowling nights with a group of friends.

It's a far cry from the retirement dreams of travel and leisure she had when her husband retired early after working more than four decades as a supermarket meat cutter. He had a pension, but the couple declined to take the spousal benefit option because his health at the time was excellent.

"At some point I'll have to just retire and do the best I can because I won't have any other choice," she said.

Millions of other Americans are heading for substantially reduced standards of living in retirement, Addkison said.

The index (wowonline.org/ourprograms/eesi), she hopes, will stoke public discussion about the lack of retirement resources available to a wide swath of people, even those above the poverty line.
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Re: Seniors feeling pinch of insufficient income

Postby ucanit » Sun Mar 25, 2012 2:15 pm

Here we go again…presenting only specific statistical values in order to hammer home a political agenda.

Women make up 60% of the U.S. population. Women over 65 were born before 1947, stayed home to raise kids and did not enter the workforce in time to accumulate enough credits to qualify for their own SSI. Therefore, they are living on the considerably lesser amount of survivor benefits instead.

This indisputable fact is always conveniently left out of arguments in favour of additional entitlements and proclaiming gender bias related to income.
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Re: Seniors feeling pinch of insufficient income

Postby DDEATH » Sun Mar 25, 2012 4:36 pm

ucanit wrote:Here we go again…presenting only specific statistical values in order to hammer home a political agenda.

Women make up 60% of the U.S. population. Women over 65 were born before 1947, stayed home to raise kids and did not enter the workforce in time to accumulate enough credits to qualify for their own SSI. Therefore, they are living on the considerably lesser amount of survivor benefits instead.

This indisputable fact is always conveniently left out of arguments in favour of additional entitlements and proclaiming gender bias related to income.



??????? You mystify me! What's the political agenda?

I only thought it was an interestng article, explaining the plight of many seniors. Makes me even more thankful for our CSR..........
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Re: Seniors feeling pinch of insufficient income

Postby daisycutter » Sun Mar 25, 2012 4:56 pm

DDEATH, I didn't see a political agenda either. The article simply confirmed what I thought all along. The vast majority of Americans are unprepared for retirement. Many in my office are not contributing enough to their TSP accounts, and they will pay a stiff penalty for doing so. I preach over and over again to the people in my office that they should try to contribute10% of their income to the TSP, because the annuity, and social security will be inadequate to finance their retirement needs. I have heard every excuse in the books from these people, and after a while I stop trying to help them. The root cause of these "excuses" can be summed up in three words: LACK OF DISCIPLINE! They can smoke a pack of cigarettes every day, go out to dinner, buy all kinds of useless stuff on a weekly basis, but they cant find the discipline to increase their bi-weekly contribution to the TSP. imagine that! :roll: :roll: :roll:
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Re: Seniors feeling pinch of insufficient income

Postby ucanit » Sun Mar 25, 2012 7:55 pm

DD, it was an interesting article and I enjoyed reading it. It does highlight a fact for many seniors and I agree with you about being thankful for our CSA and (as Daisy points out) our TSP.

I guess I got a little touchy because the article also highlighted "Wider Opportunities for Women, a Washington, D.C., non-profit group." A politically active group, driven by their desire to access premium grade entitlements for women. I just hate these subversive groups (meaning that they subvert the hard-earned wealth of others for the gain of their parasite, mooching members).

Sorry!!
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