Millions of Americans Jeopardizing RetirementMillions of Americans Jeopardizing Retirement

According to Paula Span’s recent article in The New York Times, there is a disturbing trend among elderly Americans in the lower middle class who are experiencing greater financial difficulties.

Coping with life in America has become quite challenging, especially for middle-class individuals, and this struggle is even more pronounced among older Americans situated at the lower end of the income spectrum.

Paula Span, in her regular column “The New Old Age,” featured in The New York Times, delves into various ageing-related issues. In a recent piece, she highlighted the widening income gap that poses a threat to the retirement plans of millions of Americans.

Span’s article examines recent research from the journal Health Affairs, revealing a distinct division among those approaching retirement. Essentially, there are two middle classes: an upper tier, boasting an average of over $90,000 annually in resources such as income, home equity, or retirement savings; and a lower tier, with an average of less than $32,000 per year.

Over the past two decades, the lower tier has faced a steady decline in financial stability. To illustrate, homeownership in the upper middle class witnessed a 5 percent decrease from 1994 to 2018, while the lower middle class experienced a staggering 31 percent drop. Additionally, for those employed, earnings increased by 27 percent in the upper tier but decreased by 5 percent in the lower tier when adjusted for inflation.

The losses in finances make it look like retirement security is in danger, and they also have scary effects on health and life expectancy. Compared to people in the upper middle class, older people in the lower middle class are much less likely to have health insurance through their jobs. They also say that a bigger number of people have long-term health problems.

Jack Chapel, an economist and doctoral candidate at the University of Southern California and the main author of the latest study, stressed how important it was to look at the problems in the middle class. A lot of attention is paid to the huge differences in wealth between the very rich and the very poor, but he said that the problems middle-class people face are just as important.

Paula Span told the story of Monique Louvigny, an event planner from the Bay Area who is 64 years old. Monique lost her job when she was 57, which is an older age when it can be hard to find a new one. She now works as a freelancer and carefully cuts costs by driving a Prius that is ten years old, sharing her home in Vallejo with a housemate who pays rent, and going to a food store once a month.

It’s a really unclear scenario. Paula told me that Monique Louvigny’s careful cost-cutting measures expose the precarious nature of life in the lower middle class. Paula underlined how simple it is to fall into poverty in the modern world.


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