Wishing 2009 is better financially for older people

[Crewleader]

Saul Friedman Gray Matters December 27, 2008

As someone who does not believe in making personal resolutions, let me suggest a broader hope for the new year - that it will be better than this one for older people. For on the whole, 2008 has been a bummer for many of us.

If you thought you had saved enough for rainy days, there is not much comfort for worried retirees like Ann M. of Levittown, who says in her e-mail that younger people are told to "stay put" in the market because they have time to recover. "But no one gives advice to already retired people," she says. "Do they stay put or put their money into Treasury bonds or the money market?"

My financial adviser would say, as he tells me, if you haven't already played safe with most of your IRAs or 401(k)s, it's too late. You should have had an allocation of stocks, versus Treasury and/or municipal bonds and cash, appropriate for your age. Now, all you and I can do is hold on and hope for some comeback that can give you room to re-allocate. Remember, your equities losses are on paper and won't be real until you sell.

If you're looking for tax savings, you can ask your adviser if you can sell a loser from a non-tax-deferred part of your account and take up to $3,000 in capital losses.

But we should be as concerned about older Americans, most of whom don't have stocks and suffer mostly in silence from poverty and worse. In fact, thousands of our older brothers and sisters are going hungry. Oops, we don't call it hunger anymore. According to the Department of Agriculture, the administration's statisticians decided in 2006 to call hunger by another name, "low food security," and "very low food security."

Whatever the euphemism, Agriculture's latest report, "Household Food Security in the U.S." for 2007 found that 36.2 million Americans struggled with hunger during the year, that is they reported that "consistently," they did not get enough to eat. And of those, nearly 1.8 million were people over 65, including 700,000 elderly (mostly women) who lived alone. And 700,000 were children. The old and the young, going hungry in the richest of all nations.

These sad statistics are 50 percent increases over 1998, when the number of people experiencing hunger began climbing. And alarming as the 2007 numbers are, they don't take into account the current economic recession-cum depression. You can read the full report at ers.usda.gov/Publications/ERR66/.

It's been a mark of national pride that the poverty rate among people over 65 has been under 10 percent for the past decade or so, thanks largely to Social Security and Medicare. That compares with more than 12 percent for the rest of the population. Now experts suggest that for the first time in years, the poverty rate among people over 65 will increase.

"Recent data show poverty is already rising quite substantially," said Robert Greenstein, executive director of the nonpartisan Center on Budget and Policy Priorities. In a report last month, the center predicted the current slump, with unemployment nearing 9 percent, "is likely to cause significant increases in the number of Americans who are poor and the number living in 'deep poverty' with incomes below half of the poverty line."

The current poverty line is $21,203 for a family of four, $10,590 for a single person, and $9,944 for a person over 65 (based on the supposition that older people need less to live on). An estimated 37 million Americans lived below the poverty line in 2007, including 3.6 million over 65. That number is expected to climb by as many as 10.3 million based on projections for the depth and duration of the recession, Greenstein said.

Already those on food stamps is up 9.6 percent, or by nearly 3 million people since August. One sign of the hard times: 40,000 mobbed a Colorado farm whose owner invited area neighbors to come pick at leftover crops. In nearly half of 22 states, including much of the South, the formerly industrial Midwest and New York, one in 10 residents receives food-stamp benefits, according to the Food Research and Action Center.

There may be better news ahead: I doubt President-elect Obama and his Democratic Congress will be as penurious on social and domestic spending as the departing administration. President George W. Bush reluctantly agreed to extend unemployment benefits, but the next Congress is expected to expand these benefits and provide further relief to besieged homeowners, middle-class taxpayers and the poor.

Also, as markets have soured for Ann M. and millions of other retirees and proven their unreliability for retirement, and employers have ended matches for 401(k)s or canceled pensions, Social Security has raised benefits by 5.8 percent for 2009 for 50 million Americans.

Social Security benefits continue through wars and recessions. No matter what happens with the economy, Social Security will continue to provide nearly 40 percent of pre-retirement income for the average beneficiary, as intended when the program became law 72 years ago. Social Security benefits have kept millions of older Americans from falling into deep poverty. Social Security payments account for more than half the income of most beneficiaries and 90 percent of the income of 16 million people.

Social Security will continue to provide survivor benefits for 6.5 million children. Supplemental Security Income, or SSI, is still available for the very poor. Social Security Disability Insurance payments will continue for 9 million disabled workers and dependents.

And the second pillar of the nation's social insurance system, Medicare, will continue its health protections for 45 million older and disabled Americans despite hard economic times and the failures of private insurance.

But the best news: For at least the next four years these programs will be safe from predatory politics.


SEE YOU IN 2009! FRANK KAISER
*************************

[patrice]

1. Well hell, there isn't a whole lot that could be worse than THIS year for us.

[emilyg]

2. I so hope you are right.

[notesdev]

3. You won't be saying that

next year.

The wheels have barely begun to come off this puppy.

[yy4me]

4. For Seniors like me, the time for us to do all the fancy moving

and shuffling of our savings has gone. Our retirement went down in flames on Wall Street. My husband died, I have been laid off from my job. I now have 1 Social Security check, not two. When unemployment runs out, that one SS check will be all that I have. We worked hard, had a good life and had planned for a good retirement. A death and this economy have shot all that to blazes. Couldn't sell my house if I wanted to, it is my only security, plus every other house in the town is for sale. Markable skills at my age have not kept up with technology. I am too tired and too old to go back to school.

I don't feel sorry for myself except in regard to my husbands death. I will survive but so many people will be far worse off than me. Damn this administration and it's evil doers. I blame them 100% for the ills we face.

It makes you wonder if we old timers have a shot at much of anything now. We will probably not live long enough to see things change around to something we recognize. This country has taken such a beating that it will take a generation of good things to happen to bring back our spirits and our hope.

Obama will have to put in more work than any person on earth. Along with his very impressive appointees, he will have to give the country back its pride as well as its economy.

Enough supporting wars, big business subsidies, some of the unneeded foreign aid. I'm sure President Obama knows the old saying: Charity starts at home. I believe we are at the point where we need that charity and a lot more. Charity is not only a helping hand at no cost, it is also involves giving an opportunity to someone who would not otherwise get it.

We need help and I hope he is up to the Herculean job he faces.

[trof]

5. If wishes were horses...

at least I could survive on horse meat.
I'm afraid 2009 will be even worse than '08.