Older Americans in Poverty: A Snapshot - AARP

Older Americans in Poverty: A Snapshot

Ellen O'Brien, Ke Bin Wu and David Baer AARP Public Policy Institute This report was prepared under the direction of Janet McCubbin. AARP's Public Policy Institute informs and stimulates public debate on the issues we face as we age. Through research, analysis and dialogue with the nation's leading experts, PPI promotes development of sound, creative policies to address our common need for economic security, health care, and quality of life. The views expressed herein are for information, debate, and discussion, and do not necessarily represent official policies of AARP.

#2010-03 April, 2010 ? 2010, AARP. Reprinting with permission only. AARP, 601 E Street, NW, Washington, DC 20049 ppi

Older Americans in Poverty: A Snapshot

contents

Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 What Is Poverty? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Measuring Poverty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Poverty Guidelines for Program Administration. . . . . . . . . . . . . . . . . 6 Trends in Poverty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Who Are Poor and Near-Poor Older Adults? . . . . . . . . . . . . . . . . . . . . . . . 9 Demographic Characteristics of Poor Older Adults. . . . . . . . . . . . . 12 The Geographic Distribution of Poverty among the Elderly . . . . . 21 Sources of Income and Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Sources of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Sources of Assistance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Affording Basic Needs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Affordability of Health Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Affordability of Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Affordability of Food . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Assets of the Elderly Poor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 What Are the Assets of Poor and Nonpoor Older Adults?. . . . . . . 42 What Is the Distribution of Assets of Older Adults? . . . . . . . . . . . 44

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Improving the U.S. Poverty Measure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 What Would a New Poverty Measure Look Like?. . . . . . . . . . . . . . 46

Poverty Policy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 What Would It Take to Close the Poverty Gap?. . . . . . . . . . . . . . . . 55 Options for Reducing Poverty among Older Adults. . . . . . . . . . . . 55

Appendix Tables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

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Older Americans in Poverty: A Snapshot

OVERVIEW

P overty among the elderly remains a serious and persistent problem in the United States. Nearly one in ten adults age 65 and above live in a family with income below the official U.S. poverty line, or federal poverty level (FPL). In 2008, an adult age 65 and older living alone was counted as poor if his or her annual cash income before taxes was below $10,326. An elderly couple with income below $13,014 was counted as poor.1 Nearly one in six older adults was poor or near poor, with income below 125 percent of the FPL, and about a third had low income--below 200 percent of the FPL.

The fact that 3.7 million older adults do not have sufficient cash income to meet their basic expenses too often escapes attention. By most accounts, elderly poverty is a problem we have largely solved. Since 1968 the poverty rate among adults age 65 and older has declined by about a third, falling from 25 percent in 1968 to 9.7 percent in 2008. In contrast, poverty among younger adults, and especially among children, has risen in recent decades even as national prosperity, real gross domestic product per capita, has grown. But poverty--particularly poverty among the elderly--is mismeasured and poverty rates are still unacceptably high, especially for certain groups of older Americans.

Poverty hits some groups of older adults more than others. Twenty percent of older adults who are black or Hispanic are poor, and poverty hits older people with limited education and those who are not married especially hard. Most poor adults age 65 and older are not married--either widowed (43 percent), divorced or separated (19 percent), or never married (8 percent). Older women of color are especially likely to live in poverty. Nearly a quarter of older women who are black or Hispanic are poor, and more than a third are poor or near poor (with income below 125 percent of the FPL).

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