by Tibisay Zea. This article originally appeared in El Planeta, New England’s Spanish-language newspaper. Haga clic aquí para leer este artículo en español.

One of the biggest challenges of aging is securing economic stability while productivity progressively decreases. This seems harder to achieve in Massachusetts, as it has the worst financial security numbers for older adults, shows a recent study by the Institute of Gerontology at the University of Massachusetts, Boston (UMass Boston).

More than half of people 65 or older in the state live alone, and a third of those living as a couple do not have enough money to cover their basic needs on their own (housing, transportation, health care and food), according to the Elder Economic Security Standard Index, or the Elder Index.

This situation is even more difficult for people of color: 91 percent of Hispanic elders, 78 percent of Asians, and 72 percent of African Americans in Massachusetts suffer from economic insecurity.

“Older people of color experience substantially higher risks of economic insecurity compared to their non-Hispanic white counterparts, a pattern that is also observed in the United States as a whole,” said Nidya Velasco Roldan, a researcher at the Center for Social and Demographic Research on Aging at UMass Boston. She is co-author of the study “Living Below the Line: Economic Insecurity and Older Americans.” 

And the problem is getting worse. In 2016, an elderly couple in good health renting an apartment in Suffolk County needed $39,500 a year to cover their expenses. This year, those same basic expenses rose to $48,100.

“Massachusetts is one of the states where the rate of economic insecurity increases the most year after year, and much of this has to do with housing costs,” said Velasco Roldan. In fact, the Consumer Expenditure Survey (2018) confirms that a large percentage of the expenses of elderly adults in the United States are associated with housing, either in the form of rent or mortgage costs.

A one-bedroom apartment in Boston costs, on average, $1,901, which makes it one of the most expensive cities in the country, according to current Fair Market Rents figures from the federal Department of Housing and Urban Development.

There is a subsidized public housing program for older adults in Massachusetts, but these units are often located on high-value land, and the average waiting time is eight years, said Andrés Del Castillo, community organizer for City Life/Vida Urbana. This organization fights for fair rent prices and provides free legal services for low-income families displaced in Boston. “The elderly immigrant population has an extra struggle: barriers like language or technology can be a huge impediment to access public services,” Del Castillo said.

The second most significant cost for older adults in Massachusetts stems from health care, especially medications. According to the Elder Index, a couple 65 or older in good health has out-of-pocket expenses of $808 per month, on average.

Seniors who earn more than $1,000 a month do not qualify for MassHealth-Medicaid coverage, which is the most affordable health care option. Many who exceed this amount could not afford the additional burden of private supplemental “MediGap” insurance to pay for costs that Medicare doesn’t cover. Those premiums can run from about $125 to over $200 per month, depending on the plan.

Mass Senior Action, Health Care for All, and other community health organizations are campaigning to increase the maximum income limit for seniors who qualify for state-funded Medicaid from $1,000 to $1,700 a month. That would allow tens of thousands of older people to save thousands of dollars in health care costs each year. Governor Charlie Baker proposed to expand eligibility for state-supported medical assistance by some 40,000 people, but it is yet to happen.

Created by the Center for Social and Demographic Research on Aging at UMass Boston, the Elder Index is a more accurate alternative to the Federal Poverty Level (FPL), which calculates a fixed standard of poverty for the whole country.

As living costs in Boston or San Francisco are not the same as in San Antonio or Indianapolis, the tools to measure poverty should take into consideration geographical differences.

“In cities where the cost of living is very high, the poverty level is not accurate and many people find themselves “in the gap”, meaning that they have an income that exceeds the level of poverty, but that still falls short to meet their needs,” says Steven Wallace, Professor at the University of California, Los Angeles, School of Public Health, where he directs the Center for Minority Aging Research.

That is exactly what is happening in Massachusetts.

Finance experts recommend saving as much as possible for retirement during your adult life. However, once you reach the golden years, the strategy should change, advises Eric Liriano, a certified personal financial advisor working in Boston. He recommends:

1. Evaluate your Social Security situation.

Ideally, you wait as long as possible to claim your Social Security benefits, because the more you wait, the more you receive. But this is not possible for many people. The poorest elderly population in the United States depends mainly on the income from Social Security. “It is important to evaluate your personal case: if you have other savings or retirement plans, if you are eligible for certain public benefits or if you receive contributions from family, which allow the Social Security payment to be delayed,” Liriano said.

2. Reduce expenses.

It is a good idea to make a monthly budget and identify your big expenses. Then you can see if you are able to reduce or even eliminate some of them. For example, you may consider selling a car you don’t use anymore, moving to a smaller space, living with a family member, or even renting that spare room that you have at home. Some immigrants choose to retire in their home countries.

3. Inform yourself about your health benefits.

Find out if you are eligible to receive Medicare and Medicaid, and cover the gap with one of the affordable plans offered by the Massachusetts Health Connector. (Remember that the deadline to apply for medical insurance in the MA marketplace is January 23.) To get free counseling on your eligibility and best insurance choices, contact the Massachusetts state-run SHINE Program.

4. Do not take risks.

If you have savings or a retirement plan, it is a good idea to keep that money in a safe and secure account. Everything you have in your savings and money market accounts is protected by the Federal Deposit Insurance Corporation, so even in the event of an unauthorized transaction, the bank will reimburse your funds, provided you report it in time. “The time to take risks in the stock market has ended, as there is not much time left to recover losses if the market crashes,” advised Lirano.

 

 

Tibisay Zea wrote this article in Spanish for New England’s El Planeta and translated it for  English-reading audiences with the support of a journalism fellowship from The Gerontological Society of America, Journalists Network on Generations and the Silver Century Foundation.

The opinions expressed in this article are those of the author and do not necessarily reflect those of the Diverse Elders Coalition.