As America Ages, Elderly Seen as Healthier, Wealthier

The nation’s would-be retirees are healthier, wealthier, living longer and retiring earlier.

Presumably, they are also wiser.

If you are 62, statistically, you are one of the four out of five Americans taking early retirement. The 62-year-old and older group now represents one-sixth--40 million plus--of the country’s 245 million population.

Individuals 65 or older who are heads of household now have per capita incomes second only to those in the top-ranked 55-64, or “the near old,” age bracket.

While 5% of the nation’s aged do live in nursing homes, the vast majority of the other seniors--exceeding 75%-80%--are among the fortunate who “live in their own homes, free of mortgage, drive their own cars, enjoy vacations and lead what some describe as an envious life of retirement.”

That comforting news was given at a recent conference dealing with the “Issues of the ‘90s” at the Hoover Institution at Stanford University by a nationally prominent authority on Social Security.

A senior fellow at the institute, Rita Ricardo-Campbell, author of “The Economics and Politics of Health,” added:

“There are, of course, large numbers of poor among the aged but there are a far greater number who are well off. The lowest incidence of poverty for any age group is for those 65 and over. This group pays only 14% of income on taxes, compared to 22% nationwide.

“People are living longer and healthier. The labor shortage stemming from lower birth rates is already encouraging employers to find ways to entice older persons to continue working.

“The Social Security system redistributes (income) from middle- and high-income elderly to low-income elderly, as well as from young to old.”

Looking ahead, she said the greatest hope for financing long-term care for America’s aging population lies with the private sector, not the federal government.

“The private sector,” she said, “can offer more options at lower cost, including nursing home care, to our elderly. “

One major and virtually untapped income source for those elderly who have a home, lies in reverse annuity mortgage plans that can provide the owners with income based on the value and appreciation of their home.

Reverse mortgages are basically home loans that work backwards. Instead of getting one lump sum and then repaying the money monthly, the borrower gets a monthly check from the lender and repays the entire loan in a lump sum when the term of the loan is up--typically, when the home is sold or the borrower dies.

These reverse mortgages allow older homeowners to tap the equity they have in their home without having to pay back the loan on a monthly basis--an important consideration for those on fixed incomes.

“Development of reverse annuity mortgages and long-term health-care insurance would help the cash flow of many elderly,” Ricardo-Campbell said, allaying potential or likely conflict between the young and the old.

She feels that the Bush Administration will be getting involved more and spending more on “programs for the young, our children and grandchildren.” As an example, she cited one proposal that would provide child-care tax credit for some parents.

But she reminded the conference that seniors are carrying a big load to pay for the Catastrophic Health Insurance Act passed last year. Older persons with substantial income will pay a surtax of 15%, up to a maximum of $800, and by 1993, the rate will jump to 23%. That would mean a maximum of $1,050 per person and $2,100 for a couple.

She noted that the legislation, combined with the 1983 cutbacks in prospective Social Security benefits, “supports (economist) Milton Friedman’s thesis that as the number of aged increases, the aged politically will have less influence.”

The vigorous and assertive American Assn. of Retired Persons could give Friedman a pretty good argument on that score. But Congress is not likely to reverse last year’s bill, and since 1975, the rate of increase in expenditures for the aged and elderly has declined.

Furthermore, the new care bill does not deal with the estimated 30 million uninsured people in the nation nor the aforementioned aged 5% who need long-term nursing home care.

So, those who rank with the longer living and wealthier group, count all your blessings--and good health.