Wed, 15 Dec 2010 14:20:49 +0000
Back in March of this year, I did a post, “4 of 10 Americans Can’t Afford to Retire,” on the alarming statistics that 4 out of every 10 Americans have retirement savings of less than $10,000, and nearly 3 of 10 Americans have retirement savings of less than $1,000.
Yesterday, the UK’s Daily Mail tells us that an estimated half of those Americans who are already of retirement age (60 to 84) will face poverty, defined as not having enough liquid assets to allow them to get through unanticipated expenses or declining income.
Nearly half of elderly Americans will face a future with at least one year below or close to the poverty line, a new study has shown. The study also claims to show a huge racial divide in prospects for the elderly.
Mark R Rank, a professor at Washington University in St. Louis, said the results of his research contradict popular beliefs about the economic stability of America’s elderly population. ‘We have an image of the elderly as doing pretty well,’ he said, adding that data spanning 35 years does not support that assumption.
Elderly black Americans are almost twice as likely as whites to sink to the poverty level, according to the study. It estimates 64.6% of black Americans and 32.7% whites will face poverty. ‘There are historical differences between whites and African-Americans. In all age groups, African-Americans are more likely at lower paying jobs and have much less assets,’ Rank explained.
As with income poverty, the study which was published in ‘Families in Society: The Journal of Contemporary Social Services,‘ showed a sharp racial divide in poverty. While 58% of those between 60 and 84 will at some point fail to have enough liquid assets to allow them to get through unanticipated expenses or declining income, African-Americans were found to be 2.4 times more likely to experience asset poverty.
The study also highlights the role of education in the financial future of the elderly, Rank said. Nearly 50% of people with less than 12 years of education are likely to experience poverty, compared to 20.5% with more than 12 years.
Rank believes that legislators should consider policies to encourage senior citizens to save more for retirement and to live together to share resources, as well as other measures to strengthen income safety nets. ‘Given the current demographic and economic trends in America, this threat (of poverty) is quite likely to remain in the years ahead.’