A recent article from Forbes reports that the federal government is expected to spend half its budget on older adults by 2029.
That is an enormous amount of money. By “older adults,” we mean those Americans aged 65 and older. With the aging of the Baby Boomer population, the American population is about to become very gray, and a number of industries are not able to keep up with the demand, including housing, finance, healthcare, retirement, and government services. As of 2017, the US Census Bureau estimated there are 47.7 million Americans aged 65 and older. About 42.9% of those older Americans are reported as living alone, and about 16.8% are still considered employed as part of the labor force.
The really interesting stats come next: the Census Bureau estimated income for the previous 12 months for this population as of 2017. 90% received Social Security income; 6.4% received Supplemental Security income; 1.8% received cash public assistance income; and 48.6% received retirement income. 8.9% of older Americans also received food stamps or SNAP benefits. This would seem to indicate that many seniors rely on either retirement income, such as a 401(k) or IRA, and/or Social Security income.
The Forbes article notes that much of the government funds will be spent on health care and retirement benefits. While Medicare and the Older Americans Act provide some assistance, the relief is modest and may not account for the high costs of senior care today. Social Security, retirement, and pensions don’t stretch as far as they used to, leaving many older adults floundering when they find they’re coming up short or if there’s an emergency that drains their finances.
With the housing crash in 2008, higher health care costs, and increased financial dependence or need among younger generations, many older Americans don’t have enough in savings or insurance to get them through their golden years.
Thus the expected increase in spending. As a result of higher costs and the distance between family members, older adults may be considering other options, such as aging in place with a roommate, receiving in-home care, senior living communities, or moving in with family or friends as they’re able.
As Howard Gleckman, the author of the Forbes article, points out: “…we need to acknowledge the reality that supporting an aging population will cost money—a lot of it. We can carry that burden as individual families or collectively. But we cannot ignore it.”