Living longer on less: The new economic (in)security of seniors in Massachusetts

March 27, 2009

The New Economic (In)Security of Seniors, issued today by the Institute on Assets and Social Policy (IASP) at Brandeis University finds that Massachusetts seniors face widespread financial insecurity. Almost 7 in 10 senior households in Massachusetts lack sufficient resources for long-term economic security, according to the study. Economic risk is especially pronounced for single senior households—with 82 percent among them facing financial insecurity.

These findings are a result of analysis utilizing the new Massachusetts Senior Financial Stability Index (MSFSI) and paint a daunting picture for state's aging population. The combination of inadequate pensions and savings, high housing costs, and accelerating health expenses, and other trends that affect seniors, will likely get worse unless policies are enacted to address them.

"The current economic crisis will compound economic vulnerabilities that have been building for years in current and future senior households unless policies are developed to reverse these trends," said Tatjana Meschede, lead author of the report released today.

Particular vulnerabilities identified in the report include:

• 42 percent of the state's senior households do not have adequate financial resources from savings, Social Security, or pension income to cover essential expenses across their expected life spans.
• 35 percent of senior households have no financial resources left each month after paying for essential expenses and therefore cannot cover extras or unanticipated expenses.
• 52 percent of senior households face significant housing expenses, forcing older Bay State residents to cut back on other necessities in their budgets.

"With a higher percentage of seniors than the nation overall, Massachusetts should be a leader among states in preparing for the aging of the population. The state has many assets to build on, but policymakers must develop policies to address the high cost of living in the state," urged Thomas Shapiro, co-author of the report and Director of the Institute on Assets and Social Policy.

These ominous trends for older adults have been accelerated by the current economic crisis, increasing the urgency to stabilize and enhance retirement resources. "Future retirees will be worse off unless we attend to policies that grow their resources for the future, and combat the rising costs of essential expenses for seniors," said Meschede.

Source: Brandeis University