Here’s a very scary thought, and in light of today’s economic situation, it really brings home a stark reality.
Between 1993 and 2008, a Market Watch survey found that 43 percent of American retirees that died, had $10,000 or less in savings at the time of death.
Now to be clear, that didn’t mean they lived in poverty, because in addition to those savings, some had pensions, and most received Social Security. But what it points out is that virtually none of the households was in a position to withstand any type of financial shock to their pocketbook, such as a huge out of pocket medical expense, a new roof or a busted hot water heater.
Obviously, different segments of the elderly population have different financial situations. Net worth, including home equity, savings, pensions, stocks, bonds and Social Security showed an interesting picture of America’s retirees. Single people who had never married had assets averaging about $142,000, while respondents to the survey where both spouses were alive had an average net worth of $253,000.
That picture, now four years out of date, appears to be getting even more bleak as COLA, the adjustments to cost of living expenses that increase your Social Security payments do not take into consideration rising food costs or the price of gasoline or heating oil for our homes.
Add to that the fact that almost every time seniors receive even a slight increase in their Social Security checks, they also see an almost identical cost increase in their Part A or Part B deductible for Medicare, which for most seniors is taken directly out of those Social Security checks. Therefore, the supposed increase is almost entirely wiped out.