Toward Economic Security for Older Adults: The Time Is Now

Economic security means economic justice. Now, more than ever, is the time to act to bring economic stability to millions of older people in or near poverty and redress a legacy of economic inequality so that future generations of older people have greater opportunities to save for a secure later life.

As we write this article, the economic security of older adults is more precarious than it has been for many years. People of all ages feel the squeeze of rising inflation, but it is especially harmful to older adults on a fixed income. The long tail of COVID is undermining older adults' ability to afford the rising cost of healthcare. While nearly 2 million older people have left the workforce during the pandemic, many now need to return to work to make ends meet. But despite the number of job openings, ageism contributes to making it more difficult to re-enter the workforce. Decreasing reserves in major social insurance programs like Social Security and Medicare continue to erode older adults’ confidence in their retirement security.

However, economic security was fragile for many older adults even before the pandemic. The numbers reflect this: one-third of older adult households have no money left each month or are in debt after meeting essential expenses. Over the past two decades, the percentage of older people carrying indebtedness and the amount of bad debt have increased by 50%, including credit card, medical and student loan debt. One in four older adults depends upon Social Security for at least 90% of his or her income, but since 2000 the value of Social Security benefits in real dollars has declined 34%.

The pandemic has highlighted what advocates and scholars in this area already knew: systemic inequities have led to higher poverty rates for people of color, LGBTQ+ older adults and women. Racism, discrimination and inequities have affected people throughout their lives, resulting in economic disparities as they age.

Promoting Economic Security in Later Life

Economic security means economic justice. Now more than ever is the time to act to bring economic stability to millions of older people who are in or near poverty and redress a legacy of economic inequality so that future generations of older people have a greater opportunity to save for a more secure future.

‘One in four older adults depends upon Social Security for at least 90% of his or her income.’

RRF Foundation for Aging (RRF) is a national funder dedicated to improving the quality of life of older people, with a particular commitment to achieving economic security in later life for those most at risk of poverty. We are excited to see ASA and its partners commit to collective action toward economic justice for all older people. There is a role in this for all of us—everyone from service providers and professionals who touch the lives of older adults every day to advocates and policymakers who seek to remedy and advance systems that provide economic security. Researchers provide data upon which the case for economic justice can be made, while the media can build awareness and momentum. Private philanthropy can support these efforts. Most important, older adults can provide compelling stories and serve as the best advocates for themselves, their peers and their families. We all make a difference.

RRF takes a three-pronged approach to promoting economic security in later life. We offer it as a framework for your thoughts and actions.

  • Provide access to sufficient income by strengthening the safety net. Practically speaking, later life is more about maximizing income and assets and less about economic mobility and closing the wealth gap. But, helping older people become aware of and navigate the complexities of a wide array of benefits, and advocating to expand and streamline enrollment in benefits, can make a significant difference for low-income older people. For example, the Healthy Illinois campaign’s advocacy efforts made Illinois the first state in the nation to make Medicaid-like healthcare coverage available to uninsured, low-income, older immigrants regardless of their immigration status through the new Health Benefits for Immigrant Seniors Program.

    As a result, in the program's first year, 11,000 uninsured immigrants, ages 65 and older, received healthcare coverage for the first time at a value of $140 million. RRF supported the advocacy efforts of Healthy Illinois through funding to the Shriver Center on Poverty Law, a Healthy Illinois executive committee member. Healthy Illinois, along with its more than 70 partner organizations, led the campaign that resulted in this legislative victory. It is now working on expanding the program and helping many more states make their case.
  • Build financial knowledge and skills. Building financial literacy is pivotal for older adults so that they use the resources available to them wisely—from preserving and managing savings to understanding benefits, dealing with housing assets or costs, addressing debt and bankruptcy, and avoiding financial exploitation. RRF supports programs like LifeWise StL, which operates the Senior Resiliency Fund in one of the most disadvantaged communities of St. Louis. This program helps older people who have low-income, primarily African American women, gain financial knowledge through group education and individualized coaching by certified financial social workers. The program also matches participants’ savings as an incentive to save, a way to empower participants to make sound choices, and establish behavioral changes that lead to continued savings.

‘Building financial literacy is pivotal for older adults so that they use the resources available to them wisely.’

  • Advocate for a stable, equitable retirement system. The U.S. retirement system comprises a piecemeal set of policies and programs. These programs, including Social Security, Medicare, the pension system and individual savings vehicles, need reforms to make them more accessible and equitable.

We have seen advocacy work effectively to support older people. The Pension Rights Center, a national nonprofit, nonpartisan consumer organization, exemplifies the essential role that advocates play in crafting, promoting, and advising on economic security policy reforms and the important contribution philanthropic support can make.

In 2021, the Center won an enormous victory that it set out to accomplish seven years ago. The goal was to find a solution that would rescue severely underfunded pension plans and protect current and future retirees’ hard-earned pensions. For several years, retirees of insolvent plans or their surviving spouses saw the pensions they counted on for their later years slashed by as much as 70%. Take Claire, the 81-year-old widow of a freight carrier whose monthly survivor's pension was cut from $2,050 to $600. Forced to go back to work part-time, she said she was “living like a miser,” even cutting in half the recommended dosage of an essential blood-thinning prescription drug.

Using a “common ground” approach, the Center identified stakeholders, often with disparate views, to work together to design a compromise solution that ultimately led to the passage of the 2021 Butch Lewis Emergency Pension Relief Act. As a result, at least $97 billion will be provided to plans to protect the pension benefits of more than 3 million retirees and workers who belong to these plans.

More than 100,000 people like Claire will get their benefits restored and paid back, and workers will be protected in the future. When Claire learned of the passage of the Butch Lewis Act, she said, “I will know I have that nest egg in case I have to have someone come in and care for me. I can go to the doctor and not worry about co-pays. I can just live again.”

We invite you to read RRF's Issue Brief Working Together to Achieve Economic Security in Later Life. Please join us in a collective commitment to bring about economic justice for all older adults to ensure they have the means to achieve a secure and dignified later life.

Mary O'Donnell is president of the RRF Foundation for Aging (RRF), in Chicago, Ill. Naomi Stanhaus directs RRF’s Economic Security in Later Life priority area.

RRF Foundation for Aging, a national grantmaking organization, is one of the few private foundations in the U.S. devoted exclusively to aging issues. Implementation of RRF's strategic plan calls for increasingly focused and proactive grantmaking, collaboration, and knowledge sharing. RRF has a strong commitment to eliminating ageism and fostering diversity, equity and inclusion on all fronts.