Fewer seniors are living in poverty, study says
Experts are worried that younger generations aren't prepared for retirement.
The percentage of seniors nationwide living below the poverty line has plummeted from 27 percent to 9 percent today, according to a Beacon Journal analysis of census data.
"That is a success story," said Harvey Sterns, director of the Institute for Life-Span Development and Gerontology at the University of Akron.
The sharp decline has occurred at the same time that the elderly population — defined as age 65 or older — has more than doubled in the country to 40.6 million people.
Today, there are 3.7 million seniors living in poverty, compared with 5.2 million in 1969, when the 1970 census was conducted.
The reasons are pretty simple, experts say: It's a combination of Social Security, pensions, 401(k) programs and Medicare that has kept more elderly people from slipping into poverty.
Seniors also can continue working if they want today, as there are more nonlabor-intensive jobs available than decades ago.
However, the Kaiser Family Foundation released a report last year saying the 9 percent poverty figure is too rosy.
It noted that poverty rates for the elderly actually are higher under the supplemental poverty measure, which deducts health expenses from income. Using that standard, the foundation concluded, 15 percent of seniors are living in poverty — still well below the number from decades ago.
The poverty gains also have leveled off over the past decade and — in some Ohio counties such as Cuyahoga, Medina and Summit — actually have crept up slightly since 2000.
The census defines the poverty threshold for those 65 or older as $11,173 a year for a single individual and $14,095 for a two-person household.
"I'm glad I'm not living under a bridge," kidded Joel Sundholm, 73, of Hudson.
Thanks to an engineering degree from Cornell University and a pension, IRA, Social Security and Medicare, he is far from poor. But Sundholm said he's also far from independently wealthy.
He continues working as a consultant in the steel industry to help with his house payment.
Sundholm learned money management — and frugality — from his mother, a piano teacher and church organist who worked seven days a week after her husband died.
Sundholm was only 2 at the time, and the family had to move in with his grandmother.
He describes his early years in Pittsburgh as "lower middle class or upper poor class."
Today, that experience growing up still resonates when he sits down at the beginning of each year to map out his annual expenses. He tries to pin down every potential cost, ranging from utilities to gifts.
Many seniors were influenced by the Great Depression, either living through it or learning about it from their parents, said financial consultant Bruce Jentner of Jentner Wealth Management in Fairlawn.
Those struggles have played a role in how they live and deal with their finances.
"They are people who are not afraid of hard work or to live within their means," Jentner said. "As much as I do believe I value the dollar and do work hard ... I didn't face some of the challenging economic circumstances as the current seniors did when they were in their early days."
With pensions disappearing and concerns about the stability of Social Security, experts are worried that younger generations aren't prepared for retirement.
"They either don't participate (in 401(k) programs) or don't participate very much, and because they don't have a pension, I am concerned that a lot of people today are going to be grossly unprepared for their retirements tomorrow," Jentner said.
Sterns said he's concerned that policymakers are looking to shift resources from seniors to children, which would reverse poverty gains for older adults.
"Do we want to undermine a real success story in the United States?" he asked. "We don't want to lose ground there."
Shahla Mehdizadeh, an adjunct associate professor at Miami University and researcher with the Scripps Gerontology Center, said she wouldn't be surprised to see senior poverty grow.
Many people lost jobs in the recent recession and started collecting Social Security early, so they won't receive full benefits, she said.
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