Author: The Senior Citizens League (i): Contact: SeniorsLeague.org
Table of contents and important points:
A survey to determine the financial impact of the coronavirus on older Americans found that nearly half of retirees say they’ve given up essentials.
45% say their retirement savings have depreciated significantly and they have cut their spending. Another 13% say their retirement savings have declined, but they cannot cut any further.
19% postponed filling out one or more prescriptions due to price spikes due to coronavirus bottlenecks or supply chain disruptions.
According to the Senior Citizens League (TSCL) survey, 48 percent of respondents said they went without food, prescription drugs, face masks, and disinfectant detergents during the coronavirus pandemic. “Our survey shows that nearly half of the nation’s retirees may not have the resources to cope with COVID-19,” said Mary Johnson, a social security and Medicare policy analyst for The Senior Citizens League.
The online survey among 401 participants was carried out in June and early July 2020. Here are some key findings:
How the coronavirus pandemic is affecting the finances of older households
- 48% have given up essentials, including food, disinfectants, face masks, due to shortages, rationing or high prices.
- 45% say that their retirement savings have depreciated significantly and that they have cut their spending. Another 13 percent (13%) say their retirement savings have declined, but they cannot cut any further.
- 19% postponed filling out one or more prescriptions due to quarantine or emergency stay at home orders.
- 19% postponed filling out one or more prescriptions due to price spikes due to coronavirus bottlenecks or supply chain disruptions.
“The ability to withstand major economic downturns is particularly important in retirement, but extremely difficult for today’s retirees and those nearing retirement,” said Johnson. “There are a number of factors that reduce disposable retirement income from traditional sources,” says Johnson. The “defined benefit” pension plan has become rare and is available to only about 16 percent of private sector employees, according to the Bureau of Labor Statistics.
Most companies have moved from traditional fixed-benefit pension plans to 401 (k) plans, which are invested in the equity and bond markets and vary based on investment performance and profitability based on expected returns.
While 401 (k) plans have had relatively high returns for a decade recently, these plans come with higher risk and place responsibility for savings, investment decisions, and management on individuals. “These are three skills that most of us have never learned, let alone expected, to practice after we retire,” says Johnson. “One simple mistake can affect your standard of living in retirement for years,” says Johnson.
“Another factor that affects retirement income is the level of initial social security benefits at first retirement. Social security benefits are not growing as fast as they have been in decades,” said Johnson. This is especially true for middle to low income workers due to slow growth in real wages over decades. According to a report by the Congressional Research Service, real wages rose between 1979 and 2018 for top earners, but stagnated or fell for middle to low earners. “That is reflected in the (often disappointing) initial social security benefits of new retirees,” says Johnson.
In addition, the full retirement age – the age at which individuals are entitled to full, unreduced social security benefits – is increasing. Retiring before full retirement age will permanently reduce benefits by up to 30 percent. The full retirement age, which is currently 66, increases by 2 months per year for people born after 1954 to 1959. For people born in 1960 and after, it is 67 months.
To help older Americans weather the financial impact of the COVID-19 pandemic and provide more adequate retirement benefits, the Seniors League supports laws that would improve social security benefits for all retirees and tie annual cost of living adjustments to a more representative consumer price index for seniors, the consumer price index for the elderly (CPI-E). For more information on efforts to strengthen social security benefits, please visit www.SeniorsLeague.org
With 1.2 million supporters, the senior league is one of the largest non-partisan senior groups in the country. Their job is to nurture and support members and supporters, educate and inform seniors about their rights and freedoms as US citizens, and protect and defend the benefits that seniors have earned and paid for. The Senior Citizens League is a proud member of The Retired Enlisted Association. Visit www.SeniorsLeague.org for more information.
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Journal: Disabled World. Language: English. Author: The Senior League. Electronic publication date: 2020-07-22. Last revised date: 2020-07-22. Reference title: “Almost 50% of seniors forego the essentials during the pandemic”, Source: Almost 50% of the seniors forego the essentials during the pandemic. Summary: A survey conducted to determine the financial impact of the coronavirus on older Americans shows that nearly half of retirees say they’ve done without essentials. Retrieved on December 19, 2018 from https://www.disabled-world.com/news/seniors/essentials-pandemic.php – reference category number: DW # 104-13861.
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