Where Older Adults Are Most Financially Insecure

Getty Images/Richard Eisenberg, Next Avenue Editor

When most of us (and retirement experts) consider how well equipped we will be for a financially secure retirement, we often consider how much money we have saved. But Jan Mutchler, a professor at the University of Massachusetts Boston, believes there’s another way to look at it: Will you be able to pay the local cost of living?
According to the figure crunching done by Mutchler and her colleagues at the University of Massachusetts Boston’s Gerontology Institute to create the Elder Index, the answer is tragically no for millions of Americans.
According to Mutchler’s recent study (“Aging in the 100 Largest Metropolitan Areas: How Do Older Adults Fare?”), at least 37 percent of single residents aged 65 and older and at least 12 percent of older couples are at risk of being unable to afford basic needs and aging in their own homes in each of the 100 largest U.S. metros.
However, in other areas, where at least 60% of older singles and 40% of older couples confront economic insecurity, Mutchler discovered that conditions are far worse. (On the Elder Index website, her team has Elder Index numbers for each of the nation’s 384 metro regions.)
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And these figures don’t include the potentially astronomical costs of long-term care. According to the HealthView Services research and consulting business, long-term care costs for an average healthy 65-year-old woman would be $373,712 and $237,368 for a male (excluding Medicare premiums and co-pays).
I chatted with Mutchler about where and why older Americans are most financially vulnerable, as well as what can be done to help:
What is the Elder Index and how is it calculated? Next Avenue: What is the Elder Index and how is it calculated?
Jan Mutchler (Jan Mutchler): The Elder Index is a cost-of-living index for senior citizens that serves as a benchmark for what seniors need to get by and remain independent in their communities.
They would not be able to take a vacation or gift large sums of money to their children or grandchildren, but they would be able to remain in their house.
And how do you come up with the figures?
We’re looking at survey data from the government to see how much people actually spend on housing and health care. Then there’s a survey about how much older individuals who don’t work need to drive on a daily basis to get their work done. We have food information as well as a tiny amount of extra information to address the basics. The figures are then calculated for various places across the country.
Also, explain me what the goal is. Why is it necessary to build an Elder Index?
We wanted something that would give folks a sense of where they are in terms of their retirement savings and whether or not continuing to work would be helpful to them.
What is the current state of the Elder Index in terms of economic stability or insecurity across the country?
To put it another way, it reveals that getting by costs significantly more than the poverty line suggests. It also costs more than Social Security benefits.
The Elder Index is larger than the average Social Security benefit in every area, regardless of the county, state, or metro area you’re looking at. As a result, it is evident that people cannot live solely on Social Security.
When we look at elderly persons living alone in the United States, we find that over half of them do not have enough money to afford the cost of living in their current area. As a result, it suggests that a large number of people are struggling.
What did you discover when you looked at the top a hundred metropolitan areas?
A lot of metro cities in California, as well as the majority of metro areas in the Northeast, such as Boston and New York City, are extremely costly. There are a lot of people there who are below the Elder Index. The cost of living in Chicago is extremely expensive. There are also locations throughout Florida. It is obvious that living costs are extremely high in these places.
However, McAllen, Texas has the highest percentage of people falling below the Elder Index. El Paso is another option. Those are places where the expense of living isn’t excessive. Despite this, a large percentage of people are falling below the index.
Clearly, what’s going on there is that your incomes are really low.

Massachusetts Institute of Technology Boston
As a result, economic insecurity among the elderly is not always strongest in areas with the highest cost of living. Right?
Exactly.
And were there any places that startled you, where you didn’t expect people to have such a hard time surviving? Or ones where you predicted a bigger number of persons experiencing economic insecurity than there actually was?
Those Texas border areas surprised me, to say the least. The high poverty rates and high percentage of those living below the Elder Index are shocking.
I live in Massachusetts, and I was dismayed to discover that nearly every Massachusetts metro area has a large percentage of persons living below the Elder Index.
I’m aware that persons in Massachusetts with extremely low earnings may be eligible for government programs or non-cash assistance to help them bridge the gap. And in some regions of the country, those supports may not be available.
These benefits are not as generous in many states as they are in Massachusetts and other locations.
What do these services and supports look like?
There is a lot more subsidized housing, more generous nutrition programs, or simply more possibilities to take advantage of nutrition services that help offset food expenses in some regions and states.
Benefits are available in many states and towns to assist people in paying their utilities or property taxes.
So, while there are several programs available, people must be aware of them and be able to utilize them.
If I’m in my fifties or sixties and considering where I’d like to reside in retirement, how should I use the Elder Index to help me make that decision?
Many people tell us that they utilize the Elder Index in this way; folks who are quite meticulous about wanting to make their retirement savings go as far as possible. I believe the Elder Index will be helpful in this regard.
I believe it is critical for folks to consider what types of programs or benefits may be available.
There are many factors that influence where individuals reside, but I believe the Elder Index is one of them.
Let’s say I want to see if a neighborhood I’m considering moving to has any services or resources. Is there a simple way to access that information, either locally or nationally? Are you a regular visitor to the Area Agency on Aging?
The Area Agencies on Aging would be the most consistent place to work across the country. The National Council on Aging’s website also contains a wealth of information.
Do you believe that federal, state, or local policies should change to alleviate economic insecurity, particularly in regions like McAllen, Texas, based on your research? If that’s the case, what would you like to see them do to improve their service?
There’s a lot that could be done, in my opinion. And I believe that something should be done.
I believe that the reality that half of all Americans living alone at age 65 or older have earnings that are below the Elder Index, incomes that do not support them remaining healthy and stable in their own homes, says that something has to be done.
I believe that our research comparing the Elder Index to Social Security shows that Social Security benefits are inadequate. It clearly points to continuing to sustain or increasing support for Medicare to assist older individuals in paying their medical bills at the federal level.
There is a lot that can be done to safeguard seniors’ quality of life when it comes to property taxes, such as tax deferrals and tax waivers.
What about the cost of long-term care? Is there anything you’d want to see done to assist older individuals who reside in areas with high long-term care costs?
Long-term care costs are not included in the Elder Index. The truly remarkable aspect of those costs is that they can swiftly double your living expenses.
The fact that the majority of long-term care is provided by family members, prompting some of them to quit the workforce early or face financial difficulties, demonstrates this. Long-term care is clearly an issue that needs to be addressed at both the federal and state levels, in my opinion./nRead More