Senior Poverty is a Growing Concern. Here’s How Social Security Can Help.
It’s no secret that seniors are struggling financially as housing costs, medical expenses, and the price of consumer goods skyrocket. According to an article by The Atlantic, the situation will worsen as more Baby Boomers enter retirement.
Senior poverty is a growing concern. Census Bureau data shows that older Americans were the only demographic whose poverty rates increased significantly from 2015 to 2016. While poverty fell among other age groups, it reached 14.5 percent for people aged 65 and older.
Understanding Retirement Funding
The U.S. retirement savings system rests on three pillars: Social Security, employer-sponsored pensions or retirement-savings plans, and individual savings. This is why it’s often referred to as a three-legged stool.
But, as the article explains, “With the rise of less stable jobs and the decline of pensions, a larger share of older Americans are relying only on Social Security, without either of the two other pillars to contribute to their finances.”
A big problem is that Social Security only replaces about 40 percent of income and experts say retirees need about 70 percent of their pre-retirement income to live comfortably. Making matters worse, Social Security is facing a looming deficit. If nothing changes, it will no longer be able to pay full benefits in about 10 years.
Reducing Senior Poverty
Tackling senior poverty is one of the tenets of the Social Security Expansion Act. According to its fact sheet, recent evidence indicates that nearly 40 percent of seniors rely on Social Security for a majority of their income and one in every seven seniors rely on it for more than 90 percent of their income. Making matters worse, nearly half of Americans age 55 and older have no retirement savings.
When enacted, the Social Security Expansion Act will help eliminate senior poverty by increasing the Special Minimum Benefit and indexing the benefit level so that it is equal to 125 percent of the poverty line, or over $18,000 for a single worker who had worked their full career.
This landmark piece of legislation will also increase Social Security benefits by about $200 per month, establish a fairer cost-of-living adjustment (COLA), and extend the solvency of the Social Security Trust Fund through 2096, ensuring benefits are not cut.
The Seniors Trust is dedicated to ensuring the passage of the Social Security Expansion Act. We believe it is essential for the financial future of American retirees. This comprehensive piece of legislation seeks to reform Social Security the right way: by expanding and strengthening benefits proven to reduce senior poverty and improve retirement security as well as by extending the solvency of this crucial program.
Please, sign our petition to Congress and join us as we strive to improve the lives of senior citizens.
