Nationwide, Seniors’ Income is Below Recommended Levels
If you feel that your senior family member’s income from retirement savings, Social Security, pension, and investments is slightly below the level you’re comfortable with, you are not alone! Retired people across the country are facing retirement income shortages compared to the current cost of living, according to an annual survey. There are quite a few different factors affecting this situation, including rising fuel/food costs, an increase in the income of many working people, and high costs for services and products that seniors need.
How a “Comfortable Income” is Calculated
It’s impossible to put a dollar amount on the ideal income for a retired senior. That’s because the same services and products cost different amounts in different states—just look at the discrepancy in gasoline prices from state to state. Housing is another major expense that fluctuates between states, and even between communities within the same state. In order to set a baseline senior income, experts use each state’s annual median household income as the reference point. When a senior’s income is at least 70% of that number, we consider him able to live “comfortably.” Unfortunately, in only one state (Nevada) is that true on average.
California: Not as Bad as Some States
In California, the median annual income for a retired senior is just over 60% of that of a working person. That is significantly lower than the recommended income level, but higher than at least 22 other states. The situation is worst for seniors in New England, where the cost of living is higher than in other areas of the country. Of course, not all seniors earning a less than “comfortable” income are in financial danger; many of them learn to cut costs where possible and rely on working family members for some of their needs.
Expenses Specific to Seniors
On the other hand, seniors have some expenses that their younger counterparts do not. Without a good insurance policy, prescription drugs and medical devices such as hearing aids, dentures, glasses, and wheelchairs can put a heavy drain on resources. Another factor is the possibility of moving into a nursing home, where monthly rates are typically very high. In the coming decades, those rates are expected to increase as more retirees need constant care.
In-home caregiving is sometimes the key to allowing a senior to continue living comfortably at home, despite a lower than recommended income. Hiring a professional caregiver costs a fraction of the expense of a long term care facility, unless you require 24-hour care. Even then, the level of attention and care that you receive with one-on-one in-home care, compared to care in a facility, where there may be nine or more residents per caregivers, may be worth the difference in price for many families. With the cooperation of family members, all of a senior’s needs can be provided at home with a minimal financial burden.