A recent issue of Forbes contains a report on the status of economic inequality among those over 65, finding that the gap between the “haves” and “haves not” is greater than the gap among those in younger age groups.
Stephen Crystal of Rutgers University, and Dennis Shea and Adriana Reyes of Penn State found that despite Social Security, inequality is widening among older adults. Their paper was published in the latest issue of The Gerontologist.
This disparity effects everyone. Younger folks may provide care or support for parents or aging relatives. In communities, the aging population needing housing, medical care, and social services will grow as the Baby Boomers continue to retire. Without sufficient services, the nation may find itself struggling to design creative solutions for growing inequality and basic needs of those 65+.
Many in that group rely solely on Social Security. As the authors of the article in The Gerontologist argue:
…those 65 and older, those making less than about $26,000 (the lowest-income 20 percent) are overwhelmingly dependent on only one source of income—Social Security. In 2010, that program provided 65 percent of their total income, and another government safety-net program, Supplemental Security Income, accounted for another 7 percent. Few worked after 65, so wages accounted for only about 5 percent of their income. The annuitized value of their assets, including savings and investments, accounted for about 12 percent of their total income. As the authors say, for them, the oft-cited three-legged stool of retirement (Social Security, pensions, and investments) is really only one leg—Social Security.