Newspaper article THE JOURNAL RECORD

Present Retirees Fare Better

Newspaper article THE JOURNAL RECORD

Present Retirees Fare Better

Article excerpt

WASHINGTON (JR) -- Americans age 50 and over are "unquestionably" better off financially than people the same age were 20 years ago. Yet, there are troubling signs that not all boats have been lifted by the rising tide of prosperity -- and not all boats will stay afloat, according to a new report by AARP.

"Beyond 50 -- A Report to the Nation on Economic Security" examines status and trends affecting the 76 million Americans age 50 and over. As the first of an annual series planned by AARP, the 2001 report suggests a clear need for families and policy-

makers to rethink their strategies for improving economic security.

The report takes a unique approach to analyzing the 50+ population, segmenting this group into three distinct age subgroups: age 50-61, called "pre-retirees"; age 62-74, identified as "younger retirees"; and those over age 75, the "older retirees." Using data that spans 20 years, it focuses in part on the key issues of Social Security, personal retirement savings and investment, workplace op- portunities and health care coverage.

Based on its findings, AARP unveiled an alternative to the traditional concept of the so-called "three-legged stool" of retirement security, which includes Social Security, private pensions and personal savings. Instead, AARP calls for a foundation for retirement that includes four supporting "pillars" -- a sort of four freedoms -- Social Security, pensions and savings, earnings and health insurance.

Among the report's key findings:

* Thanks to faster growth in income among retirees, the income gap between retirees and pre-retirees has diminished. Retirees' incomes grew more than twice as fast as pre-retirees' incomes since 1980. Wealth also grew at a more robust pace among retirees than among pre-retirees. But inequality of income and wealth increased. Incomes grew faster among the top quarter than the bottom quarter, and wealth disparities widened.

* Four in 10 Americans over age 60, regardless of their current economic circumstances, will experience poverty at some point in their later lives. The chances of a person in this age group experiencing near-poverty (falling below 125 percent of the poverty line) is even greater: 1 in 2. Low-income pre-retirees age 50 to 61 have median savings of just over $6,000 and may need to work longer than they had planned to survive economically. Census data show a recent up tick in the number of 65 and over Americans who are working now, and a 1999 national AARP study of 2,000 boomers found that 80 percent said that they planned to work into their retirement years.

* Health care coverage, which is critically important to the economic well-being of all Americans, decreased among people age 50- 64 since 1988. Even those with Medicare coverage (age 65+) spend nearly one-fifth of their income on health care. …

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