Retirement, as portrayed in TV commercials, is the time to indulge a passion, whether tennis, enjoying more time with a spouse, frequent socializing, or civic engagement.
Boston University sociologist Deborah Carr isn’t buying this idealized picture of aging.
“This gilded existence is not within the grasp of all older adults,” she argues in “Golden Years? Social Inequality in Later Life.” “For those on the lower rungs of the ladder,” she writes, retirement is “marked by daily struggle, physical health challenges and economic scarcity.”
Her book, which mines multidisciplinary research on aging, reaches the distressing conclusion that economic inequality not only exists but that it becomes more pronounced as people age and become vulnerable. And this problem will grow and affect more people as the population gets older.
Poverty has actually declined among retirees since the 1960s. But by every measure – health, money, social and family relationships, mental well-being – seniors who have a lower socioeconomic status are at a big disadvantage. They have more financial problems, which creates stress, and they are more isolated and die younger.
Throughout the book, Carr documents the myriad ways the disparities, which begin at birth, reinforce each other as people grow up and grow old.
“Advantage begets further advantage, and disadvantage begets further disadvantage,” Carr concludes. For the less fortunate, “old age can be the worst of times,” she said. …Learn More
If the difference in men and women’s pay is a gap, then the wealth difference can only be described as a chasm.
Women earn 80 cents for each dollar a man earns. But a woman has 32 cents of net worth to a man’s dollar.
One byproduct of the #MeToo movement is the fresh light it has put on the age-old women’s issues of unequal professional status and pay. But Elena Chavez Quezada, senior director of the San Francisco Foundation, explains in this video that wealth – home equity and financial assets minus debts – provides a more accurate picture of financial stability over the long-term.
A 2018 report found that net worth for older women, adjusted for inflation, has actually declined over the past two decades.
“If we are going to build women’s economic security, we have to talk about income and wealth inequality,” said Quezada, whose foundation promotes economic security for women and minorities.
Of course, wealth can’t be separated from pay. Women are able to save less, because they earn less and are more likely to have part-time jobs. A smaller share of them have a retirement plan at work than men, and the typical female worker saves 6 percent of her pay, compared with 10 percent for men, according to the Transamerica Center for Retirement Studies.
Although single women have slightly higher rates of homeownership than single men, if a woman can’t afford as large a down payment as a man, she starts out with less home equity.
Older women of color saw the largest decline in their net worth, according to the 2018 report, which was conducted by the University of Pennsylvania’s School of Social Work and the non-profit Asset Funders Network. …Learn More
One thing really stood out in a recent study: the deterioration in Hispanics’ retirement prospects since the 2008-2009 recession.
Workers’ success at saving for retirement is becoming increasingly important to their financial security in old age. This puts Hispanic households at a clear disadvantage: they earn half as much as white households, which makes it that much more challenging to build retirement wealth by buying a house or saving more in their 401(k)s – two-thirds of Hispanic workers don’t even participate in an employer 401(k).
White Americans aren’t exactly in great shape either. Today, 48 percent of them are at risk of experiencing a drop in their standard of living after they retire – this is 6 percentage points higher than before the recession, according to a new study by the Center for Retirement Research. Black Americans are worse off than whites, though their situation hasn’t changed much over the past decade.
But 61 percent of Hispanic workers are at risk – a 10-point jump since the recession – the study found. A big reason is that Hispanic homeowners were hit especially hard by plunging house prices during the mortgage crisis in states like Florida, Nevada, Arizona, and California, where they are heavily concentrated. Their home equity values dropped 41 percent, a result of buying “houses in the wrong place at the wrong time,” the researchers said.
The loss of home equity has a big impact on retirees by reducing the amount they can extract from their properties by purchasing less expensive housing or taking out a reverse mortgage. (The researchers assume that when workers retire, they will use reverse mortgages.) …Learn More
Retirees’ primary sources of income are the usual suspects: Social Security and employer retirement plans. They rarely use a third option: the equity locked up in their homes.
The Urban Institute recently quantified how much this untapped equity could be worth to seniors in the United States and 10 European countries if it were converted to income – and the amounts are significant.
The typical retired U.S. household has the potential to increase its retirement income by 35 percent, researchers Stipica Mudrazija and Barbara Butrica estimate. In Europe, using home equity would add anywhere from 19 percent in Sweden to 100 percent in Spain. …Learn More
Nearly 10 million seniors are having difficulty paying for housing – and the problem is growing.
Housing experts typically recommend that people keep their housing costs below a third of their income. But one in three Americans over age 65 are spending more than that on their rent or mortgage payment, utilities, property insurance, maintenance, and other housing costs, according to a new study, “Housing America’s Older Adults,” by Harvard’s Joint Center for Housing Studies.
If the senior housing problem hasn’t reached crisis proportions yet, Jennifer Molinsky, who wrote the center’s report, predicted that it will if nothing is done to increase the supply of housing structures that are both affordable and age-friendly to meet the needs of aging baby boomers. The number of households over 80 will more than double over the next 20 years, the housing center estimates.
“Unless we create more options for people at the middle- and lower-income levels, we are going to be seeing that people have fewer choices and that they’re forced into options they don’t want,” she said. …Learn More
As Americans were riveted to the spectacle of teetering Wall Street behemoths in 2008, another ruinous tragedy was beginning to unfold: a national foreclosure crisis.
Black and Hispanic homebuyers were hit hardest by the foreclosures that resulted from unbridled sales of predatory subprime mortgages, which exceeded $500 billion annually at the market’s peak.
In the decade since the financial crisis, the stock market has rebounded smartly, but the damage to minority communities remains. At the height of the foreclosure crisis, entire neighborhoods were littered with bank foreclosure sales and realtors’ signs advertising sales of the properties.
About 30 percent of black and Hispanic borrowers’ homes in total have gone into foreclosure in the years since the housing market crash, compared with 11 percent of whites’ homes.
“For [minority] families, financially destructive foreclosure events delayed and potentially derailed the dream of homeownership,” the Federal Reserve Bank of St. Louis concluded in a report on the continuing impact of the financial crisis.
But the damage goes deeper than that. Because home equity is often the most valuable asset that people own, the foreclosure crisis “severely damaged the balance sheets of minority families,” the Fed said. …Learn More
Kathy Barker already was having concerns that her elderly father’s dementia made it increasingly difficult for him to manage his life. When his doctor said he could no longer drive, Barker had to do something.
A contractor was hired to build a 448-square-foot cottage in the backyard of her Tampa home. Her father enjoyed it for just 10 days before going into the hospital, where he died. But the house was still a great solution – this time for her mother, JoAnn George. (Her parents divorced long ago.)
Last November, George was moved into the backyard “granny pod,” which has a front porch, living room, bedroom, bathroom, and small refrigerator – but no other appliances. Granny pods, which come in a variety of architectural styles, from Victorian to modern, aren’t cheap. George’s cottage cost $90,000 to build, putting it in the higher end of the price range for these dwellings, according to Home Care Suites, which built it. [Here’s the virtual tour of the house.]
The 88-year-old George had been living in nearby Plant City, Florida, close to another daughter. But as she slowly declined, Barker decided that moving her into the backyard made sense. A flood in her mother’s home, caused by a broken pipe, provided a convenient opportunity to take matters into her own hands.
Now Barker, who runs a web development business with her husband out of their home, can keep a close eye on her mother. Although George is developing cognitive issues, she still takes care of herself, is healthy, and takes no medications.
The beauty of separate living quarters, Barker said, is that her mother can “keep [her] own independence.” … Learn More