By Mike Festa
It’s no surprise that the older adult population in Massachusetts is increasing rapidly. In 2010, those aged 65 and older accounted for 14 percent of the state’s population. However, by 2030, that figure will grow to 21 percent. To be economically secure at any age, one’s income must cover basic living expenses. If housing, health care, food, transportation and other incremental expenses are not sufficiently covered by household income, we must support effective strategies to fill the gap or the household will suffer severe economic hardship in retirement.
In order to take a closer look at these issues, the Elder Economic Security Commission was established in the fiscal year 2014 state budget and was tasked with examining strategies to increase economic security for older adults and enable older residents to remain in the commonwealth and in their communities. To do so, the Commission was charged with assessing older adults’ current level of economic security; identifying policies and programs currently in place to assist older adults; assessing the needs of state and local programming to determine what additional funding is needed; considering a set of best practices to enhance elder economic security; and issuing a final report in April 2016. The Commission established four working groups that encompassed the critically important areas of income, housing, long term services and supports, and health care.
The Commission, co-chaired by state Rep. James O’Day (D-West Boylston) and state Sen. Pat Jehlen (D-Somerville), was made up of various elder stakeholders and advocates, including AARP Massachusetts.
The Elder Economic Security Standard Index (Elder Index) has calculated that for the counties in Massachusetts, community-dwelling older adults’ expenses can vary from $23,052 to $45,348, depending on many factors. Long term care needs are an additional expense, which can also vary greatly. A recent report by the U. Mass. Gerontology Institute, using the Elder Index as a measure, found that 63 percent of Massachusetts’ retired elder households lacked sufficient income to meet their daily needs. Those figures are more troubling for diverse populations, as the study found that 81 percent of African American and 91 percent of Hispanic senior households’ incomes fall below the Elder Index.
The Commission’s recently released report identified two general policy recommendations that are designed to address income, housing, healthcare, and long term supports and services.
“The recommendations in this report address many potential economic hardships that older adults often face,” said state Sen. Pat Jehlen (D-Somerville), Senate Chair of the Joint Committee on Elder Affairs and co-chair of the Elder Economic Security Commission. “The important work of the Commission is already having an impact as the MA Senate recently adopted amendments to its budget addressing the report’s recommendations to: fund community-based geriatric mental health services; study feasibility of spouses as paid caregivers; and fund expanding access to home care for those just above the income threshold.”
O’Day added, “It was a humbling experience to have served on the Elder Economic Security Commission. I am pleased with the improvements being recommended by the commission to assist the commonwealth’s elder community in the future.”
The Commission concluded that Massachusetts should adopt the Elder Economic Security Standard Index as a benchmark for determining the economic needs of older adults in the Bay State. Other general recommendations are designed to increase or preserve older adults’ retirement savings, such as extending the Earned Income Tax Credit (EITC) for working people aged 65 and older; expanding the nonprofit state retirement plan to nonprofits and businesses with less than 100 employees; increasing Supplemental Security Income payment amounts to commonwealth recipients; and promoting Money Management seminars and counseling to increase financial literacy.
With this new report, the Elder Economic Security Commission’s recommendations should help close the gap between income and expenses for our most vulnerable population. Older adults play a vital role in the commonwealth’s economy. AARP estimates that each $1 of the $13+ billion in Social Security benefits received annually by Massachusetts elders generates $1.98 in economic activity by the state. Therefore, policies that help elders achieve economic security in retirement benefit us all.
Mike Festa is the state director for AARP Massachusetts.
