A new report from the Government Accountability Office (GAO) indicates seniors are in financial trouble and that many are relying heavily on Social Security to get by.
The GAO report, Income Security: Older Adults and the 2007-2009 Recession, describes the financial difficulties facing older adults. According to the report, net income for older adults has declined from 2007 to 2009. The median household net worth for those aged 75 and older declined from 229,000 in 2007 to 191,000 in 2009, and the net worth of those aged 65-74 declined from 233,000 to 206,000. This decrease in net worth was accompanied by a large percentage of older Americans earning low incomes. 42 percent of those aged 75 or older had incomes below 200 percent of the poverty level in 2010, compared to 22 percent of those in the 55-59 age group. Although the adults in their fifties appeared to fare better on this measure, the report warns that they might be worse off when they reach retirement. Those approaching retirement will have little time to recoup losses to their retirement savings and will be less likely than the older generation to have defined benefit plans to rely on.
The report also found a large disparity in wealth of households with a member aged 65 or older. The average annual income varied from $7,466 for those in the lowest of five income groups to $109,503 for the highest of five income groups. Those earning the least relied heavily on Social Security retirement benefits. For those in the lowest income group, Social Security benefits comprised 83 percent of total income, while those in the middle class relied on Social Security for 64 percent of total income.
Read the full Government Accountability Office report.
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