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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsThe Scary Truth About Seniors and Money
http://www.alternet.org/economy/scary-truth-about-seniors-and-moneyI realize that Pew is a very prestigious outfit, but Pew's garbage is still garbage. It's report on wealth by age group, or at least the interpretation that it and others have given this report, fits the bill.
A couple of years ago, Pew did an analysis that gave breakdowns of wealth by age group. It found that the median household over the age of 65 had $170,500 in net worth. I was actually pleased that they came up with this number, since it meant that the projections that I had done more than two years earlier with my colleague David Rosnick were almost right on the nose. It's always gratifying to see other researchers independently corroborate your findings.
But what was remarkable about this report was that the Pew researchers took this number as evidence of the affluence of the elderly. The study points out that this was a 42 percent real increase from the 1984 level. By contrast, households under age 35 saw their median net worth fall by 68 percent to just $3,700. This disparity in wealth by age continues to be the take away from this report in the media.
To realize the absurdity of this position, try thinking for a moment. The bulk of people who are now turning age 65 do not have a defined benefit pension. (They did in 1984.) This means that the only income they have is their Social Security check, which averages a bit over $1,200 a month. Right off the bat, $100 a month is subtracted to pay for their Medicare Part B premium. This means that our high living seniors have an income of $1,100 a month, plus their $170,500 in net worth.
GTurck
(826 posts)may be their house which they cannot sell because they could not afford to pay the rents asked today and the house is paid off. Wealth should be measured by the sort of items that guarantee ready cash when it is needed and not something that cannot be fungible.
kelliekat44
(7,759 posts)Seniors over 65 do not have the medical bills or medical costs that the rest of the population has, especially those raising families. Also, they don't have insurances to pay like the rest of us. And remember, this is median income figure which is further proof that the 2% at the top have 90% of the wealth in this country. All those millions of poor seniors only help to bring down the wealth median.
TheKentuckian
(25,023 posts)so most seniors probably have higher medical expenses than the rest of the population so they either have a fair chunk going out or have to pony up for a supplement. The senior population also needs more medication on the whole.
I also don't know what insurances they don't have. If they drive then they pay auto, they need coverage for their homes like anyone else, many carry very expensive but low yield life insurance that maybe will cover burial.
I suspect more than anything we are talking having the house paid off or higher levels of equity, a lifetime of little savings, and the IRA or 401k being mature. Some still have pensions and what not but that is nothing to put much weight in moving forward.
kiva
(4,373 posts)but friends who are on Medicare generally have supplemental health insurance, which isn't cheap. And house or renters insurance, because - barring a lottery win or unexpected inheritance - seniors will never seen an improvement in their finances so need to protect what they have, since odds are they can't replace it. Car insurance if they drive. So out of Social Security take out those additional expenses.
Jeff In Milwaukee
(13,992 posts)These are people who are no longer saving for retirement. Using the bankrate.com calculator, $170K would yield only about $750/month for thirty years (you're expected to die after that). And that's ASSUMING that the $170K is cash to be invested -- the article makes it clear that it is not. The authors don't estimate, but another website estimates that the average retirement savings of people in the year or two before retirement is only about $100,000. So back to our bankrate.com calculator, and that comes to $400/month ($4,800 per year).
Demo_Chris
(6,234 posts)How could they not? They had their entire working lives to accumulate it.
More, during these seniors working careers the nation's largest employers were major manufacturing corporations paying HUGE salaries and epic benefits. Today the top ten employers are primarily companies like Walmart and McDonalds paying as close to minimum wage as possible, often part time, and no benefits. It wasn't until today's retirees were heading towards their pensions that they passed NAFTA and the other FTAs. And no, it wasn't young people who voted to export their own careers.
There are other factors as well. Healthcare wasn't always this expensive. Nor was education. Thats all relatively recent and the cost has primarily impacted young people.
marions ghost
(19,841 posts)old, young, and in the middle.
Nobody's got it real good except the rich.
Demo_Chris
(6,234 posts)1-Old-Man
(2,667 posts)In addition to the many who were employed by major manufacturing corporations there were also many who were employed by Government at local and the Federal levels. Government employee's pensions, which are thought of as the blue-ribbon prize-winners today, were at the time if not as good as those in the public sector at least more likely to actually be paid out; many people opted for Government jobs even with their lower pay and lessor benefits simply for the job security. My how the world has changed.