Living independently is a goal for many who are approaching or thinking about retirement. While most people don’t expect to move to a gated retirement community with a golf-course, they do hope to have adequate financial resources to live modestly and with dignity. How much will they need?
The Gerontology Institute of the University of Massachusetts Boston and Wider Opportunities for Women have released a report updating the National Elder Economic Security Standard Index (EESI). The EESI is a benchmark for measuring the economic security of the elderly. The EESI goes several steps further than the federal poverty measure by factoring in the ways that the costs of housing, health care and transportation vary by individual circumstances and geographic location.
The report finds that single individuals need anywhere from $19,104 to $28,860 to meet their basic living expenses, depending on whether they own or rent their homes. Couples need between $29,448 and $39,204 to meet their basic expenses. Either way, the EESI figures show that the federal poverty level is badly out of date, and that Social Security alone – with an average benefit of $15,178 – cannot provide individuals with enough income in retirement.
Ellen A. Bruce, of the Gerontology Institute and the Pension Action Center (home of the New England Pension Assistance Project and the Illinois Pension Assistance Project), summarizes key findings of the study and implications on the retirement security of America’s older population in a blog for the American Society on Aging. The National Elder Economic Security Standard Index should serve as a wake-up call for policymakers and anyone who is working to increase the economic security of current and future retirees. Instead of looking for ways to cut Social Security benefits, policymakers should look for ways to expand the program and improve our pension system to make sure the basic needs of older Americans are met.