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The Gerontology Institute at my university has been collaborating with Wider Opportunities for Women on the Elder Economic Security Standard Index (EESSI) for quite some time. I was a part of this project during my assistantship back in 2011. The project focuses on each state in the nation, breaking it down to the county level, to determine how much elders actually need to maintain their independence and meet their costs of daily living. It was very important to bring this kind of assessment down to the state and county level, which is not how the poverty threshold used by our government works. For one thing, the costs of housing, child care, health care, and transportation vary greatly based on where you live.

Though the EESSI measured poverty on these levels, it came to a startling conclusion about the nation as a whole.  Even though costs vary based on where you live, in every state and every county the poverty threshold for an individual ($10,890/yr) or the average Social Security benefit ($14,105/yr) is NOT enough to maintain independence, and these elders needed housing and health care supports to cover their basic expenses.

The purpose of this tool is to have “a measure of income adequacy that respects the autonomy goals of older adults, rather than a measure of what we all struggle to avoid – poverty.” Some of the Gerontology Institute’s other findings include: (1) Housing costs are the greatest expense for most elder households, and elders can spend up to half of their income on housing. (2) A major life change, such as the death of a spouse or a major health shock, can create a situation where someone who was once meeting their expenses can no longer do so.

Check out the full report here to learn more: http://scholarworks.umb.edu/gerontologyinstitute_pubs/75/

If you want to learn more about adequate income for your state and county, look at WOW’s website: http://www.wowonline.org/ourprograms/eesi/

During my study of retirement income security something has always bugged me.  Countless articles and reports suggest smart asset allocations are the tried and true way to have a successful retirement (and still say this even after the economic recession). They talk about the value of investing and give financial advice that is clearly geared toward those with ample resources. Advice for the little guys is rarely provided, though arguably they need it more. Most people try to save for retirement but end up with little financial wealth. They’ll probably spend at least some of their retirement struggling financially.

A recent article by the Center for Retirement Research explores ways individuals can leverage their savings and assets so they are more likely to have a secure retirement. They suggest financial planning should not only include building retirement portfolios but:

  • Delaying retirement and taking more time to contribute to retirement accounts
  • Controlling spending and using the money saved to increase your savings
  • Investing assets in ‘riskless equities’ after retirement
  • Taking out a reverse mortgage

In other words, when all your financial adviser tells you is which stocks and bonds to put your money into, they are missing the big picture. There is an array of tools that people should explore and, based on their situation, employ to help them build a secure retirement. In fact, asset allocation was found to have the smallest effect on retirement security. The paper found working six months longer produces the same outcome as moving all investments into ‘riskless equities.’

However, I’d like to bring it back to my original point: do we provide advice to those who need it most? Recently, I gave a talk on women’s retirement security to a local Council on Aging community event. Community members had wonderful questions after the talk. One question struck me most: “I didn’t know about saving when I was young, my husband did that. But we spent most of it on his illness and now he’s gone. I have nothing but my Social Security check, do you have any financial advice for me?”  Later we had a chat and I asked her some questions about her situation. I found that she had been a homemaker, she did not own her home, and she was physically incapable of working. Her monthly check was also ‘too much’ for her to qualify for government services and benefits. What advice do we have for people like her?

Researchers and financial experts are starting to explore ways low- and middle-income workers can make the most out of their savings and assets. But still, there are people currently in retirement who live on little income, own next to nothing, and would love some advice. This is particularly true of older women. Many never needed to care about their finances until their husband passed away. If anyone knows an organization or service that advises these people (for free!) please educate me…because I don’t know of one.

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