Senior Protection

Al DavisAs part of my Financial Advice: A Top Ten List yesterday, I emphasized the value that an advisor can provide by protecting seniors from making mistakes or being defrauded.  That (summary) point deserves some additional commentary.

As I noted, research confirms what most of us have seen among our families and friends.  Simply put, the ability to make effective financial decisions declines with age, often rapidly.  Continue reading


The Longevity Crisis

As the old bluegrass song goes, “everybody wants to go to heaven but nobody wants to die” (listen to the wonderful Alison Kraus version of it here).  Today and looking ahead, more and more people will be getting their wishes granted.

The nation’s 90-and-older population nearly tripled over the past three decades, according to a report released yesterday by the U.S. Census Bureau and supported by the National Institute on Aging. Over the next four decades, this population is projected to more than quadruple. 

In real numbers, that means that there are roughly two million Americans at least 90 years old today and there are likely to be about eight million people in the 90-plus category by 2050.  In percentage terms, people 90 and older now comprise 4.7 percent of the older population (age 65 and older), as compared with only 2.8 percent in 1980 and by mid-century 20 percent of the total population of the United States will be at least 65 and one in 10 of those people will be at least 90.

In its first-ever report on nonagenarians, the Census Bureau says that this group is the fastest growing segment of the population.  Therefore, the Bureau has had to change its process and revise its findings because the “oldest old” used to be 85.

A majority of this group reports having one or more disabilities, living alone or in a nursing home. People in this age group are also more likely to be women and to have higher widowhood, poverty and disability rates than people just under this age cutoff.

An older person’s likelihood of living in a nursing home increases sharply with age. While about only 1 percent of people in their upper 60s and 3 percent in their upper 70s were nursing home residents, the proportion rose to about 20 percent for those in their lower 90s, more than 30 percent for people in their upper 90s, and nearly 40 percent for centenarians.

The annual median personal income for people 90 and up as reported in the study was $14,760. Almost half (47.9 percent) of this amount came from Social Security and another 18.3 percent came from retirement pension income. 14.5 percent of people 90 and older live in poverty, a much higher rate than for those 65-89 (9.6 percent).

Among the 90-and-older population, women outnumber men by nearly 3 to 1. That means that while there are roughly 38 men for every 100 women ages 90 to 94, that ratio drops to 26 for ages 95 to 99 and to 24 for those 100 and older. More than 80 percent of women 90 and older are widowed, while more than 40 percent of men this age are married.

These older women bear a particular burden.   Less than one-third of women in this age group live in a household with family members and/or unrelated individuals, four in 10 live alone, and another quarter are in institutionalized living arrangements.

At the risk of sounding like a broken record, the implications of and the lessons from this study should be obvious.

  • Social Security and Medicare will be expected to do a lot more going forward.  Their fiscal soundness is imperative.
  • The need for sustainable income that cannot be outlived to supplement Social Security and private pensions is vital.
  • So is long-term care insurance or an insurance “hybrid” product (life insurance or annuity) that offers long-term care benefits.
  • Women are particularly at risk in this area.  Since married men tend (a) to make most of the financial decisions, (b) to be much more willing to take financial risks and avoid insured solutions, (c) to be cared for by their wives when disabled, and (d) to die first, that means they are doing their wives a major disservice by not providing adequate income and LTC protection.

Every year the Los Angeles Department of Recreation and Parks throws a big birthday bash for its oldest residents — those 90 and up.  This week’s bash hosted hundreds of them — mostly women.  The Department will likely need to keep looking for bigger rooms to hold this party for the foreseeable future.


Update:  A follow-up to this post is available here.