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Epic Economist, 10/19/23
"Retirement Crisis Triggers Biggest Homelessness
Spike Ever As People Struggle Financially"
"More elderly Americans are facing homelessness than ever before as the retirement crisis and rising rents leave millions struggling financially. Now, increasingly more baby boomers are waking up to the reality that working for your entire adult life is not a guarantee you’ll be able to afford housing during your senior years. This group has faced a series of recessions throughout their lifetime and has also witnessed the explosive growth of home prices over the five past decades. On the other hand, their incomes haven’t risen at the same pace, and many haven’t had the opportunity to save enough to retire comfortably.
According to a new report by the Wall Street Journal based on data from the Department of Housing and Urban Development, in 2023, older adults are the fastest-growing segment of the country’s homeless population. “The fact that we are seeing elderly homelessness is something that we have not seen since the Great Depression,” stressed Dennis Culhane, the social policy professor at the University of Pennsylvania.
Today, the over-50 demographic represents 50% of the homeless single adults in the U.S., meaning that baby boomers (those aged 57 to 75) are particularly vulnerable. From 2013 to 2023, the percentage of people 50 and older in homeless shelters increased from 16% to 23%. The National Health Care for the Homeless Council also found that the percentage of baby boomer patients whom it serviced in 2022 was 36% — up from 25% 15 years earlier.
At the same time, the number of affordable nursing homes and assisted living centers has shrunk, partly due to labor shortages, inflation, and reduced funding. For instance, in Florida, the state with the highest rate of US citizens 65 or older, more than 600 nursing homes have been shuttered since 2017.
Between 2020 and 2023, rents faced the fastest increase in nearly a century. In many areas, rent prices are completely out of the reach of average Americans. Moreover, an analysis by the U.S. Government Accountability Office indicated that only 1 in 10 low-income workers between the ages of 51 and 64 had any funds put away for retirement last year, compared with 1 in 5 in 2007 prior to the Great Recession. Those workers have median earnings of about $19,000 annually, noted the study, which examined data from the Federal Reserve's Survey of Consumer Finances and other sources.
Yet, the problem may not only be with people’s ability to save money for their future but the way the U.S. system is designed. On Tuesday, the new Mercer CFA Institute Global Pension Index was released, and it exposed that this year, the U.S. ranks behind 30 other countries in the 38-member bloc, which collectively has an average poverty rate of 13.1%. Analysts gave the nation’s retirement system a C+, putting the United States on par with countries like Kazakhstan, Colombia, and Croatia.
Our retirement approach is so flawed that about two-thirds of working Americans over 50 said they intend to delay retirement or are unsure if they will be able to retire when they want, an Axios-Ipsos poll found.
In a country as wealthy as the United States, homelessness for anyone — but particularly older adults — should not be acceptable. Instead of helping U.S. citizens to retire comfortably, our leaders continue to transfer their responsibility to our shoulders, forcing workers to continue to support this rigged economic system even after a lifetime of hard work."
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