Middle-income seniors face affordability crisis

In 10 years, more than half of middle-income Americans age 75 or older will not be able to afford to pay for yearly assisted-living rent or medical expenses, according to a study published in Health Affairs.

The researchers used demographic and income data to project estimates of a portion of the senior population, those who will be 75 or older in 2029, with a focus on those in the middle-income range — currently $25,001 to $74,298 per year for those ages 75 to 84.

And it doesn’t look good for that group because of the rising costs of housing and health care. The researchers estimated that the number of middle-income elders in the U.S. will nearly double, growing from 7.9 million to 14.4 million by 2029. They will make up the biggest share of seniors, at 43%.

By 2029, more than half of the middle-income seniors will have annual financial resources of $60,000 or less, even if the equity in their homes is included. Projections put the average annual assisted living and medical expenses cost in 10 years at $62,000, meaning that a majority of the middle-income seniors then will not be able to afford an assisted living facility.

Middle-income seniors are a group that Beth Burnham Mace, one of the study’s authors, said has been often overlooked when policymakers and legislators think about housing and care for aging Americans.

“The low-income cohort has been taken care of by tax subsidies, while the high-income cohort is largely self-sufficient. But the middle-income seniors have been ignored,” said Mace, who is chief economist at the National Investment Center for Seniors Housing and Care, a nonprofit research group.

The study’s authors said they are probably underestimating the extent of the looming problem. They projected out-of-pocket medical costs of only $5,000 a year for seniors.

Deborah Carr, chairwoman of the department of sociology at Boston University who studies aging, noted that Americans “are able to live longer today than they have in the past because of medical technology.” The downside, said Carr, who was not affiliated with the study, is “if they’re living for years with dementia or mobility issues, then they have to pay longer for medical care for the additional years they live.”

Indeed, the researchers projected that 60% of the middle-income seniors will have mobility limitations, while 20% will be considered “high needs,” meaning they have three or more chronic conditions and one or more limitations in activities of daily living, such as bathing or dressing. Eight percent will have some form of cognitive impairment.

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