Two-fifths of the elderly spend more than they earn, often forcing them to dip into savings to pay bills, according to a new study.
Among those 65 and older, 40% shell out more on housing, medical care and other costs than they take in from Social Security, pensions and other sources, according to the Employee Benefit Research Institute.
An additional 14.3% of that age group spend more than 75% of their incomes on regular expenses, leaving little cushion for unexpected financial setbacks, the study showed. The data were from 2009, the latest period available.
The study, “Income Composition, Income Trends, and Income Shortfalls of Older Households,” is the latest to underscore the deep financial challenges facing millions of retirees living on fixed incomes.
It also highlighted the heavy reliance on Social Security.
Households of people ages 65 to 74 derive 54% of their income from Social Security, according to the study. Those ages 85 and older got 66% of their income from the government program.
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