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Estate Planning - Tips, Tricks, and Trends

Senior Poverty and the Problem with Number Magic

Posted by Malissa Church | Nov 08, 2017 | 0 Comments

Are we saving enough for retirement? The answer, by every reliable indicator, is a resounding NO. The result? More senior citizens are sliding into poverty, a fact borne out by the statistics which show more of us are delaying retirement and continuing to work with no end in sight. For a very moving and thoughtful piece, check out this article on the RV-seniors, those moving around the country to work seasonal or other temporary jobs while living in motorhomes.

Despite a perennially appealing narrative that would have us believing people who fail to save have moral or fiscal flaw, the raw data tells a different story.

Wage stagnation, present in the US for decades, is bearing an ugly fruit. Daily living, for all but the very rich, costs much more as time goes by but the earning income is flat or falling. You can't save for tomorrow if you are hungry today.

Medical care is more costly and older people are staying in the workforce longer largely due to the large losses incurred during the 2008 recession so younger people are having a harder time finding jobs.

How does our government respond? By proposing up to 1.5 trillion dollars in budget cuts over the next 10 years - all unfunded - to provide a huge tax cut with the lion's share of the benefit going to the wealthiest. It appears to be classic number magic - make the figures align today by pushing the pain into the future.The proposed bill also repeals the medical expense deduction which is important for seniors on two fronts - tax savings and making it easier to qualify for Medicaid. Who will benefit?

The current legislation permits deep cuts and House Budget Committee members anticipate mandatory spending cuts as a priority for the 2019 budget - this will likely include cuts for mandatory programs over the coming decade including Medicare, Medicaid, and Social Security. Currently, over 6 million senior citizens receive health coverage through Medicaid - and this does not include long term care benefits. Most seniors rely on Medicare for health insurance and Social Security for a meager income. They paid into these programs throughout their lives only to see them cut. For more information on the tax 2017 proposal and potential impact on seniors, check out this link from the National Council on Aging.

Again, our leadership is focusing on short-term, quick-fix solutions to get something accomplished. If seniors are feeling income pressure now, how will it be when they cannot get the services they need? We need to consider long-term impacts to the proposed legislation and insist Washington puts forth a proposal that does not provide apparent prosperity today with promised austerity down the road. 

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About the Author

Malissa Church

Call me today to discuss affordable, comprehensive estate planning or issues you might face related to age-related dementia.

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