Elder Index Shows Limits of Social Security to Help Older Adults Afford Basic Cost of Living

Jan MutchlerSocial Security is a critical economic resource for most older Americans but those payments don’t cover even a bare-bones budget in a single county in the United States.

The degree to which Social Security payments can help elders make ends meet depends both on individual circumstances and basic geography. An updated analysis, using the Elder Index™ developed at UMass Boston’s Gerontology Institute, recently examined Social Security’s ability to cover basic elder expenses in every U.S. county and state.

“Social Security is incredibly important to older Americans as an economic safety net but it doesn’t fully cover the cost of living anywhere,” said Professor Jan Mutchler. “The effectiveness of that safety net varies a great deal across the county and among individuals. In many cases, it falls far short.”

More than half of adults age 65 or older are believed to rely on Social Security for at least 50 percent of their family income and nearly a quarter depend on that benefit for 90 percent or more of their income.

But a recently published report by Mutchler and co-author Yang Li found Social Security payments covered 69.7 percent of basic cost of living for an older single renter in good health, on average, across the United States. The remaining uncovered annual expenses amounted to $7,850.

Their state-by-state results shows a wide range of coverage — from 83.1% for those older single adults in Indiana to just 52.2% for elders on their own in the District of Columbia.

A comparable analysis of Social Security payments to older couples showed that money covered a greater percentage of their basic expenses. But those payments still fell short of a basic elder cost of living and a broad range of coverage remained from state to state.

Social Security coverage map

The institute research began with the Elder Index and its ability to calculate realistic expense data down to the county level. The index is a free online tool that can calculate the cost of independent living on a no-frills budget for older adults in a range of circumstances and health conditions.

The expense data was then matched with Social Security payment information, which is also available on the county level.

Overall, the results showed the average Social Security benefit covers the smallest share of older-adult living costs in the U.S. Northeast, coastal areas, California, Alaska and Hawaii. Typically, above-average living costs driven by high housing expenses were a big part of the equation.

After Indiana, the states with the greatest average Social Security coverage of the cost of living for single elders were Michigan, Alabama, West Virginia and Kansas.

Wyoming County, a small rural area located in the southwest portion of West Virginia, provided the nation’s best county-level ratio of average Social Security payments to single elder living costs at 93 percent. Social Security covered the smallest percentage of single elder expenses in California’s San Francisco county, just 38 percent. The actual annual shortfall amounted to $1,400 in Wyoming County and $28,000 in San Francisco.

“Our report clearly shows the limits of Social Security in helping older adults afford a very basic standard of independent living and how the impact of that benefit varies greatly across the country,” said Mutchler. “But it also demonstrates how elder access to other economic resources and policies that promote affordability of core expenses, such as housing and health care, are badly needed to improve the economic security of America’s elders.”

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