Retirement crisis for elderly is here

State Sen. Mark Mullet, D-Issaquah, has introduced Senate Bill 5826 to help small businesses offer Individual Retirement Account savings plans to their employees. This is, as they say in the Legislature, “a good little bill,” but it is dwarfed by the size of the problem it confronts.

That problem is growing poverty among the elderly. In the last half of the 20th century, poverty among the elderly in the U.S. fell from 35 percent to 10 percent, but now it’s creeping back up again, to 14.8 percent in 2012.

Experts say retirement income should be a three-legged stool. Everyone should have Social Security, pension benefits and personal savings. But for 36 percent of senior citizens, Social Security is their only income. And that percentage is likely to rise as broke baby boomers retire.

Women and people of color are the most likely to rely on social security alone, and they are the most likely to have lower than average Social Security benefits because they worked at lower-wage jobs. In 2012, 49.6 percent of unmarried women relied on Social Security benefits for 90 percent or more of their income.

The average monthly Social Security benefit is about $1,300. Many elders receive a benefit of $733, or $8,796 per year. The official poverty level for a single adult is $11,490 per year.

Elderly people who live in poverty are extremely vulnerable to isolation, poor nutrition and endless anxiety about how to make ends meet. Agencies like Senior Services for South Sound, and the Lacey and Olympia senior centers literally are lifelines for them. These agencies and their programs should not have to struggle for adequate funding, but they do. Last year for example, there was a funding crisis that left some seniors without Meals on Wheels, even though those meals were, for some, the only decent meal they would eat each day. Although that crisis has passed, it ought to have been a wake-up call about what’s to come.

As baby boomers retire, the ranks of the poor elderly and the demand for programs like Meals on Wheels are going to grow. By a lot. Between 2014 and 2030, the percentage of Washington residents over 65 will grow from 11 percent to 20 percent. Many will retire from lifetimes of low-wage jobs and periodic unemployment, and will have little or no savings. Even some who’ve been more fortunate in earnings will be in a precarious state if they’ve used up savings to put kids through college, or to pay for medical or other family emergencies. And fewer than half of boomers will have a pension.

Defined benefit pension plans are an endangered species, in spite of the fact that they are the most reliable guarantee of post-retirement income. When today’s employers offer any retirement plan at all, it’s more likely to be an IRA, and the amount saved is unlikely to last as long as it’s needed.

The specter of growing poverty among the elderly ought to inspire a concerted, national effort to protect all Americans from privation in our old age. We hope our congressional delegation will make this a high priority, because this is a problem our Legislature cannot solve alone.