A new analysis has revealed that 80 percent of Americans aged 60 and older are financially insecure, lacking adequate resources to afford long-term care or handle unexpected financial emergencies.
The study by the National Council on Aging and the LeadingAge LTSS Center at UMass Boston found that while incomes and home values for older adults saw a slight increase from 2018 to 2020, the value of their financial assets and overall wealth declined. As a result, a significant number of seniors are struggling to secure sufficient care as they age.
"This is a snowballing crisis," Ramsey Alwin, president and CEO of the National Council on Aging said in a statement. "At the same time that 11,000 people are turning 65 every day for the next several years, a growing number of older adults are facing financial stress now and will not be able to afford the care they will need in the future."
Among many sobering statistics, the report said the bottom one-fifth of older Americans, representing around 15 million households, have no assets, with some in debt. The median income among that cohot was $18,000 as of 2020, and nearly 90 percent earned less than what is needed to live independently, according to the Elder Index, an online tool that measures the costs of living independently for older adults.
Even among older adults with some financial resources, economic insecurity remains rampant. About half of Americans 60 and older, representing more than 27 million households, have incomes below the Elder Index threshold, meaning they cannot cover basic needs such as housing, food, and healthcare.
"These findings certainly show that despite gains in income, many millions of older adults continue to live on the edge," said Dr. Marc Cohen, co-director of the LeadingAge LTSS Center at UMass Boston.
Long-term care services and supports – LTSS for short – are among the largest financial burdens for older adults. The report maintains that these services, which range from in-home assistance to skilled nursing care, are out of reach for many seniors, as 60 percent of older adults cannot afford two years of in-home care. The costs of LTSS remain high, with a home health care aide costing a median of $75,504 annually, and a private room in a nursing home averaging $116,800 in 2023.
Adding to the pressure, the COVID pandemic disrupted the financial stability of many older adults, with 11 percent of people 65 and older losing their jobs during the pandemic. Widowhood, caused by increased fatalities from COVID and related complications, also left many older adults facing new financial hardships.
The report also highlights that Medicare does not cover long-term care, leaving families and individuals to shoulder the costs. While Medicaid can assist with nursing home costs, individuals must first spend down their assets to qualify.
"Congress needs to hear this alarm bell and support programs that help all Americans age with health and dignity in their communities," Alwin said.
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