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Fewer American retirees are living in poverty, new research shows. The positive turn occurred in 2015, which also brought a significant upturn in median worker income.
Just 8.8% of Americans ages 65 and older were living in poverty last year—down from 10% in 2014 and among the lowest senior poverty rates of the past 60 years, the U.S. Census Bureau reports. Coupling that data with the rise in worker income, 2015 may mark an important turning point in what had been a slow recovery from the financial crisis and Great Recession.
Median household income for a U.S. family was $56,500, up 5.2% from the previous year and the first annual gain since 2007, the Census Bureau said. The overall poverty rate also fell—to 13.5% from 14.8%. The good news across the board is largely the result of more jobs and more people working, Census Bureau officials said.
The news would be even better for retirees if not for the escalating out-of-pocket costs of health care. In a supplemental report that looks at a variety of factors not included in the official report, the Census Bureau noted a more accurate poverty rate for seniors is 13.7%—much higher than the official rate of 8.8% but down from the supplemental poverty rate for seniors of 14.4% in 2014.
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Much of the difference between the official report and the supplemental report is an adjustment for health care costs, which pushed more than 11 million people (and 2.7 million seniors) into poverty. Work expenses also pushed a small number of seniors into poverty, a sign that some people working longer before leaving the workforce are not feeling much benefit. Social Security is credited with lifting 26.6 million people (and 17.1 million seniors) above the poverty level.
The official senior poverty rates have been historically low for most of the past decade but ranged well above 10% before 1999, hitting 12% to 15% in the 1980s. Senior poverty rates were higher than that of the working population for decades but have been lower since the Great Recession, which seems to have hit working Americans hardest. Meanwhile many seniors benefited from traditional pensions and years of asset accumulation.