Retirement is supposed to be a time to relax and do all the things you couldn’t while in the job market. However, shocking new data indicates that the poverty rate among American retirees surged during recent years. This shows why saving for retirement is very important, since you may not always be able to utilize a bad credit loan to get out of a financial jam. The poverty rate of retirees between the ages of 65 and 74 rose to 9.4 percent in 2022, up from 7.9 percent in 2018, according to data from the Employee Benefit Research Institute. Older retirees, between the ages of 75 and 84, had a poverty rate of 10.7 percent. That’s up from 7.6 percent during the same period. Those above the age of 85 had the highest rate at 14.6 percent.
The rising trend of older retirees falling deeper into poverty was not surprising to some experts, according to U.S. News and World Report. Due to the rising life expectancy rate, many older Americans need to spend more on medical expenses and make their savings last longer than expected.
A majority of older retirees who have fallen below the poverty line have serious medical conditions, such as cancer, lung disease, heart problems and strokes. Meanwhile, 96 percent said they have other conditions, such as high blood pressure, diabetes, psychological problems and arthritis. In contrast, just 48 percent of retired Americans above the poverty lines had similar ailments.
How Much Do Retirees Need Saved For Medical Expenses?
According to a recent report from Fidelity, retired couples who would leave the job market this year will need an average of $240,000 just to cover health-related expenses. However, the frightening part is most retirees don’t even have that much saved for the entirety of their retirement .