I've posted before about the Self-Sufficiency Standard studies, which show, for a young family, the bare-bones cost of living by locality, for various configurations of family. They answer the question "What does it cost to live here, without subsidies or help from relatives, with all one's most basic needs met, but no frills?" These studies have been conducted in about 35 states, some as many as 3 times.
Now a similar methodology has been developed to measure the cost of living for seniors. I'm looking at the study for Pennsylvania, where I grew up and where I still have an elderly relative. He lives modestly in one of the more expensive counties, and based on what I know about wealth distribution among seniors, I've told him he's in pretty good financial condition for someone of his age. He doesn't see it that way.
As the Baby Boom generation ages, I think we are going to seen an upheaval. While I've not seen any new data for a few years, my sense is that the Boomers' savings, at least below the 75th percentile or so, are not going to be sufficient to maintain the lifestyles they now have, through their retirement years.
I suspect that one of the forms the upheaval will take is that many Boomers will find themselves unable to afford to live in the high-priced urban and suburban areas they've raised their children in, and will pick up and move, taking with them their accumulated home equity, to lower-priced places -- with fewer amenities and services. The younger taxpayers there will find themselves providing services that had not been expected in the past. (If they try to do that with a tax on wages, they're going to hurt the local economy. Ditto with a sales tax. The best alternative is a tax on land value. But I digress.)
The Elder Economic Security Standard puts some basic information together that we'd all do well to pay attention to, both at a policy level and at the individual level. It provides cost of living for six kinds of senior households:
- Elder person, a homeowner with no mortgage
- Elder person, a renter in a 1 BR apartment
- Elder person, a homeowner with a mortgage
- Elder couple, homeowners with no mortgage
- Elder couple, renters in a 1 BR apartment
- Elder couple, homeowners with a mortgage
For each of these kinds of households, in each county, the EESS calculates a cost of living (assuming good health), compares it to the federal poverty guideline, the maximum SSI payment and, at the county level, the average Social Security payment for individual or couple. It then shows the cost of home and community-based long term care, for 6, 16 and 36 hours of LT care per week.
It doesn't tell us what percentage of seniors in each county have income below the EESS level. But there is every reason to believe that the figure would be startling.
A related study, entitled Elders Living on the Edge: The Impact of Public Support Programs in Pennsylvania When Income Falls Short in Retirement, is also worth a look.
Houston, we have a problem!
Comments