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Lawmakers Take Aim At Senior Poverty



Set aside for a minute the partisan disputes over tax reform, details surrounding advisor examination and registration rules, skirmishes between multibillion-dollar insurers and trillion-dollar mutual funds over lifetime income disclosures, and nuances surrounding retirement plan fees.

Consider instead these two sets of statistics, however shocking they may seem:

Based on the government’s Official Poverty Measure, nearly 15 percent of non-institutionalized seniors – about 6.1 million – were living at or below the poverty level, according to U.S. Census Bureau statistics. Almost 50 percent of non-institutionalized seniors were living near poverty level.

For millions of Americans, Social Security has meant the difference between poverty and a merely adequate standard of living, said Sen. Susan M. Collins, R-Maine.

“Nationally, one in four retired Americans has no source of income beyond Social Security – in Maine the number is one in three – and four in 10 rely on that vital program for 90 percent of their retirement income,” she said.

Lawmakers gathered last week to explore ways to improve income security for seniors. With tens of millions of baby boomers starting to retire, it won’t be long before they reach “post-retirement,” the years in which many of them will no longer be able to lead an active lifestyle.

Lawmakers say the time has come to find new ways to insure Americans as social safety nets have come up short. Bills sponsored by Republicans and Democrats point to private sector solutions to fund future retirement needs.

Collins and Sen. Bill Nelson, R-Fla., chairman of the Senate Special Committee on Aging, are sponsors of the Retirement Security Act of 2014. The bill would encourage small employers to offer retirement plans, urge employees to save more for retirement, and offer tax benefits to low and middle-income taxpayers.

Senate Democrats have sponsored their own bill, the Universal, Secure and Adaptable (USA) Retirement Funds Act of 2014. The bill would offer universal retirement coverage to the 61 million people without access to a workplace retirement plan.

Social Security was never intended to be the primary income pillar for so many senior citizens. Lacking other forms of guaranteed income that would have kept them out of their current predicament, these seniors find themselves with little or nothing else other than Social Security.

Born Aug. 14, 1935, the Social Security Act was meant only to supplement benefits for workers, victims of industrial accidents, the chronically unemployed, dependent mothers and children, the blind and the disabled.

Coming up on its 79th birthday, a primary income pillar is exactly what Social Security has become for millions of people, even for a program whose average benefit is only $1,294 per month, or less than $16,000 a year.

“When we think of the poor, the elderly are not usually the first group to come to mind,” Nelson said. “In the popular image, retirees are free of worries about either their health or finances.”

For some Americans, retirement is indeed golden as it is portrayed in the ads. For many more, that is not the case.

As the debate around new options for private-sector retirement programs continues, experts delivered eye-opening facts about the future of poverty among the elderly.

As boomers age, “the actual number of seniors living in poverty is expected to climb,” even if poverty rates remain unchanged, said Patricia Newman, director of the program on Medicare policy and senior vice president with The Henry J. Kaiser Family Foundation.

Changes in the types of retirement benefits households receive have also made some groups of senior citizens more vulnerable than others, said Barbara D. Bovbjerg, managing director of education, workforce and income security with the Government Accountability Office.

The rise of single-parent families, more married women entering the labor force and the shift to the defined contribution plan system have disproportionately affected minorities and unmarried women, she said.

“In general, the trend away from women receiving spousal benefits is projected to continue, with the largest shift occurring among black women,” Bovbjerg said.

Most retirees with defined contribution retirement savings pass on the opportunity to convert a portion of those savings into an income annuity or take advantage of the annuity provided by an employer-sponsored defined benefit pension, she also said.

is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at

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