The Growing Problem of Poverty among Older Americans

According to data from the Organization for Economic Cooperation and Development, approximately 23% of Americans ages 65 and older are living in poverty.

According to a recent report by CNBC, as baby boomers (Americans born between 1946 and 1964) retire or approach retirement, the problem of poverty among the elderly in the United States has continued to worsen. According to data from the OECD, about 23% of people ages 65 and over in the United States live in poverty, which puts the United States behind 30 of the 38 OECD member countries.

U.S. academics believe that the increasing number of seniors falling into poverty reflects a range of social issues in the U.S., including racial disparities, structural inequality, the gap between rich and poor and age discrimination.

According to U.S. media reports, many elderly Americans often say that factors such as high prices have led to a constant rise in living costs, and they have to make difficult choices between food and medication.

Ainsley Phillips, a resident of Birmingham, Alabama, had hoped for an easier life after retirement, but that hasn’t been the reality. She said, “Rising drug prices have forced many seniors to cut back on life-saving medications and some are struggling to choose between buying medicine and buying food.”* Walter Cox, a resident of Tulsa, Oklahoma, relies solely on a Social Security check of $765 each month to pay his bills. He said, “I literally cannot afford to do anything but put gas in my car, buy groceries and pay my utility bills.”

Faced with the pressures of everyday life, more and more older Americans are relying on part-time work to make ends meet. Teresa Ghilarducci, the director of the Retirement Equity Lab at the New School for Economic Research, has said that over one-third of Americans ages 65 and older are working part-time jobs. Olivia Mitchell, a professor of Business Economics and Public Policy at the University of Pennsylvania, bluntly stated, “this [old-age poverty] is a fraught area. There’s not a simple answer.”

Another indication of the rising poverty rate of older Americans is a continued rise in the number of homeless seniors. A study conducted in 2019 by Professor Dennis Culhane of the University of Pennsylvania suggested that the number of homeless older adults will more than double between 2020 and 2030. The number of homeless people ages 65 and older in the United States will increase from 40,000 in 2019 to 106,000 by 2013. California has consistently had one of the highest populations of homeless individuals in the United States. Data show that between 2017 and 2021, while the population of older people in California grew by 7%, the number of homeless people ages 65 and older who were seeking assistance increased by 84%, more than for any other age group.

According to PBS, as baby boomers have become senior citizens, a series of recessions and the flaws within the Social Security system have led to an increasing number of elderly people without homes. The New York Times commented that the rise in the poverty rate of people over 65 indicated how the quality of life of older Americans has declined in recent years.

“We are doing so much more to subsidize affluence than to alleviate poverty.” OECD pension analyst Andrew Reilly says that there are many factors contributing to the worsening problem of poverty among seniors in the U.S., noting that the overall U.S. poverty rate is high relative to other developed nations. A report released by the U.S. Census Bureau last December indicated that in 2021, there were 37.9 million people living in poverty in the United States, with an official poverty rate of 11.6%. In an environment where the overall poverty rate is relatively high, poverty issues have naturally spread to the older members of the population.

Deep racial disparities are further emphasized when it comes to poverty among seniors. A report from the Congressional Research Service in December 2022 showed that in 2021, the poverty rate among Americans ages 65 and older who were of Hispanic origin was 18.7%, among African Americans it was 17.8% and among Asian Americans it was 16.7%. These are all far higher than the 8% poverty rate among white Americans.

Structural inequality in U.S. society has increased, making poverty among older people more difficult to address. A report from international aid organization Oxfam pointed out that structural inequality has pushed millions of working families in America into poverty, particularly those within historically marginalized groups, such as people of color, immigrants, refugees and women. Matthew Desmond, a Princeton sociology professor, has observed that many government and business policies in the U.S., favor the wealthy and increasingly impoverish the poor. He says, “most government aid goes to families that need it the least […] we are doing so much more to subsidize affluence than to alleviate poverty.”

‘Systemic Flaws in the Design of the US Retirement System Further Exacerbate Wealth Disparity’

Ramsey Alwin, president and CEO of the National Council on Aging, has said that the rising poverty rate among the elderly highlights the fact that U.S. Social Security benefits, the cornerstone of retirement security for many, are not enough to lift the elderly out of poverty.

According to U.S. media reports, basic social security benefits in the United States are lower than those in most OECD member countries. For example, the United States is the only developed country that does not provide paid maternity leave for women. Reilly says that “the base U.S. Social Security benefit is lower” than that of other developed countries.

The U.S. retirement system further exacerbates the issue of elderly poverty. According to analysis by professionals cited in the American media, the United States has a large, complex and highly fragmented social security welfare system that provides few universal or inclusive benefits. The content and level of retirement benefits in the U.S. reportedly depend on the employment status, income level and asset ownership of elderly individuals. “The systemic flaws in the design of the U.S. retirement system further exacerbate wealth disparities, trapping the middle and lower classes in elder poverty,”* experts say.

CNBC believes that overall increases in life expectancy and the entry of the baby boomer generation into retirement is putting tremendous pressure on the solvency of America’s Old-Age and Survivors Insurance Trust Fund**. The fund is predicted to be at risk of running out of money by 2033. Olivia Mitchell has said that Social Security is the foundation of the U.S. retirement system, but it has many gaps that seriously affect the lives of American seniors. Reilly believes that “the easiest way to combat poverty in retirement is to have a safety-net benefit at a higher level” but this would be extremely expensive.

*Editor’s note: These quotes, accurately translated, could not be independently verified.

**Translator’s note: The OASI is the U.S. Treasury account holding the tax receipts that fund Social Security benefits paid to retired workers, their surviving spouses and their eligible children.