Economy Hitting Older Adults Especially Hard

By Paula J. Fenza

Older Americans are filing for bankruptcy in record numbers according to a study by AARP. At the same time, less support is available from meal, transportation, and other home assistance agencies that care having trouble paying their own bills. “There's no question that the downturn in the economy is dramatically impacting those at the doorstep of retirement and those that have already decided to retire,” said Mark Kitchens, a senior vice president of AARP. Bankruptcy

The numbers of bankruptcies among older adults are staggering. Of the more than 1 million Americans who filed for bankruptcy last year, nearly a quarter was age 55 and up. Bankruptcy filings among those ages 75 to 84 skyrocketed by 433% from 1991 to 2007. Further, workers at agencies that serve older adults say the problem is only getting worse, and increasing numbers of older adults are looking for jobs to supplement shrinking incomes. As the ages of job seekers increases, nonprofit agencies who assist older adults report that people in their 80s feel the need to go back to work in order to meet their expenses. Rising food prices and medical costs are causing serious financial hardships for older adults, perhaps the hardest-hit victims of the slumping economy.

Only 21% of employers offer supplemental health coverage to retired employees enrolled in Medicare, making government and private senior service agencies crucial to keeping America’s older adults clothed, housed, and fed. But those agencies are suffering, hit by the same effects of higher costs for food and fuel. For example, more than 2,000 nationwide Meals on Wheels programs have waiting lists because it is becoming too expensive to deliver to all who need it— many are losing volunteer drivers because of rising gas prices. “For older adults who depend on such services, it truly becomes a life-and-death situation.” In Honolulu, where Meals on Wheels delivers to 700 older people a day, the number of volunteer drivers is down about 20% because drivers can’t afford the gas for their trips. The agency’s 50-cents-a-mile reimbursement doesn’t begin to cover expenses; as a result, the agency estimates, drivers now spend more than $300 a year out of their own pocket.

Senior transportation services are trying to fill the gap left by sparse public transit, but these agencies are also suffering from rising gas prices. Senior Transit Services in Columbia, Mo., is trying to keep its services affordable for the 30,000 rides a year it provides to grocery stores and doctors’ offices, but gas prices are making it tough to hold the line on its $3-a-ride fee. Daily gas expenses recently topped $1,300. As a result, many older adult services are in danger of disappearing.

Many older adults are old enough to have lived through the Great Depression and the shortages of World War II, and they are coping as best they can, but they are still facing severe problems. In an AARP survey last month, more than half of the respondents ages 50 and over said they had to cut back on their grocery expenses. Nearly 40% predicted that some food items would need to be rationed within the next year—and most dramatically, 18% said they had started eliminating some meals entirely.

But while some older adults can cut back, those with health issues often don’t have that option because expensive medications are needed to treat chronic illnesses.

Retirement plans and government benefits are also stretched to the limit as they provide for average life expectancies spanning 20 years longer than they did in the 1930s. Additionally, inflation and stock plunges are eating away at retirement accounts, while Social Security is also shrinking—the 2.3 percent increase in benefits announced in January was the smallest in four years. By comparison, consumer prices rose more than twice as much over the past year.

For more information on the economy’s impact on older adults, see the AARP report at http://assets.aarp.org.

Like the new format? Tell us what you think: askaia@matherlifeways.com