The Discrepancy Between a Senior's Earnings and Expenses
Aging Matters

For most seniors, there's a big difference between money earned and money spent on living costs. I wonder how most get by and pay for housing, food, utilities and health care. After paying for all that, very little, if anything, is left for savings.

In some cases, home budgets and rent can consume close to 50% or more of a person's income. In 2016, the poverty threshold for an individual in one of the 48 states stands at $11,880; a couple is $ 16,020. The Basic Economic Security Index measures the cost of housing, food, transportation, and health care. For 65-year-old tenants living in California, their base price for needs is $24,024. In Texas, the average is $21,400. See all states and counties.

Since health and long-term care expenditures far outweigh any other expense, the burdens can rob a senior of solvency. Two studies, the Long-Term Care Over an Uncertain Future and America Talks: Protecting Our Families' Financial Futures found that Americans would rather ignore the notion that long-term care will be necessary. Both confirmed that at least 70 percent would require continuing care, while less than 37 percent admit they'll use it.

The reports conclude that it's in the last years of life, that one will need a significant savings and income to pay for the costs accumulated by acute care since Medicare does not pay for them entirely. Older adults will require ongoing help with activities of daily life such as personal care assistance for bathing, dressing or eating. In some cases, a well-planned person can count on an LTC insurance policy, but only a few have bought it.

The 2010 U.S. Census data collated by Seniorcare.com list the earned income of seniors by a city, and state. The stats reveal that seniors have minimal resources to pay for future care. If the base price of living for one person is over $24,000 in California and $21,000 in Texas, what happens when a person needs help after a health incident or episode?

Earned Income vs. Health Care Costs

Here's what senior citizens are up against in regards to earnings and medical bills. Reviewing the average and median income, and comparing it to the long-term care costs, I found no matter what state one lives, the average earnings of an individual cannot cover the costs of assisted living or home care.

In California, the median household income for seniors 65 and over is $43,181; New York is $37,228; and Texas is $36,915. In every state, health care costs rank high, and it makes me wonder how do the people pay for it when needed?

  • California costs: Home care, for 44 hours, runs $4,385, and residential care (assisted living) is $3,750 a month.
  • New York charges: Home care is $4,004, and if you move to an assisted living community, expect to pay $4,100 each month.
  • Texas isn't much less; it runs close to the same for home care, about $3,527, but assisted living runs a bit lower, $3,545 each month.

As I mentioned earlier, the data across the other states are similar and not much more affordable. So, if you haven't prepared for future care, time is running out. And if you're still young, start saving today and check into buying a long-term care policy.

Carol Marak, aging alone advocate, columnist, speaker and editor at Seniorcare.com. A former family caregiver, She earned a Fundamentals of Gerontology Certificate from the USC Davis School of Gerontology and writes about personal concerns while growing older.



Part of the Aging Matters Weekly Syndicated Column

Aging Matters is a weekly column tackling everyday challenges that our growing elderly population and their loved ones face. It is also published in a variety of syndication partners including newspapers all over the country.

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