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Retirees reflect on financial fragility of retirement

Published in RINewsToday on December 9, 2024

Literally just hot off the press… the Los Angeles, California-based nonprofit Transamerica Center for Retirement Studies® (TCRS) in collaboration with Transamerica Institute®, released the findings of its 24 Annual Transamerica Retirement survey.  Considered to be one of the largest and longest running annual surveys of its kind, its findings paint a picture of being retired in America.

Retiree life in the post-pandemic economy examines the health and well-being, personal finances, and retirement security of U.S. retirees no longer working. The report’s analysis was prepared by the research team at Transamerica Institute and TCRS. The 25-minute online survey was conducted within the U.S. by The Harris Poll on behalf of Transamerica Institute between September 14 and October 23, 2023, among a nationally representative sample of 10,002 people, including a subsample of 2,404 retirees who are retired and do not work.

Shedding light on the many facets of retirement

According to TCRS’s retirement survey, released on Nov. 26th, fewer than one in four retirees (23%) say they are very confident and able to maintain a comfortable lifestyle throughout their retirement.

“Retirement brings freedom and time for personal pursuits,” said Catherine Collinson, CEO and president of Transamerica Institute and TCRS in a statement announcing the release of the 76-page report. “However, retirees are living on a fixed income with limited financial resources. Many would be unable to withstand a major financial shock, such as the need to pay for long-term care. Retirees’ fragile financial situation serves as a cautionary tale that underscores the imperative for strengthening our retirement system,” she says.

“Many retirees may wonder what they could have done differently to save and plan for retirement, and many may feel they have done everything right but still came up short,” adds Collinson. “In reality, over their working careers, the world has changed, the retirement landscape has evolved, and the need to self-fund a greater portion of one’s retirement income has intensified,” she said.  

Based on the report’s findings, retirees are active and engaged in meaningful ways. As retirees, they are:

·         spending more time with family and friends (58%)

·         pursuing hobbies (43%)

·         traveling (36%)

·         taking care of their grandchildren (19%)

·         doing volunteer work (16%)

·         caregiving (10%)

Although most retirees express a positive feeling about life, others say they are distressed.  Most retirees say they are:

·         generally happy (89%)

·         have close relationships with family and friends (88%)

·         enjoying life (86%)

·         have a positive view of aging (79%)

·         have a strong sense of purpose (79%)

·         have an active social life (53%)

However, three in 10 retirees (30%) have financial trouble in making ends meet, 27% indicate they often feel unmotivated and overwhelmed, 24% often feel anxious and depressed, and 17% are isolated and lonely.

Retirees who retired before the age of 65 are cutting short their working years and income, a situation that could inevitably lead to a decrease in their retirement income. Almost six in 10 retirees say they retired sooner than planned (58%) and, among them, almost half did so for personal health-related reasons (46%) and employment-related issues (43%), while 20% did so for family-related reasons. Only one in five (21%) retired early because they were financially able.

Retirees are struggling to juggle competing financial priorities and debt, the findings indicate. Retirees’ say their current top financial priorities include

·         building emergency savings (31%)

·         just getting by to cover basic living expenses (29%)

·         continuing to save for retirement (24%)

·         paying off one or more forms of debt as a current financial priority (45%)

o    paying off credit cards (30%), paying off mortgages (20%), paying off other consumer debt (10%), and paying off student loans (3%).

The survey found that the retiree’s greatest retirement fears centered around money and health issues.  Forty-two percent expressed fear that Social Security will be reduced or may cease to exist in the future.  Almost six in 10 retirees (58%) expect Social Security to be their primary source of income throughout their retirement, reinforcing their view that the retirement program is the cornerstone of their retirement income.

Retiring before age 65 impacts your Social Security benefit. Retirees currently receiving Social Security started at age 63 (median) which translates to a lower monthly benefit than if they had waited until their full retirement age of 66 or 67, depending on the year they were born. Only 4% of retirees waited until age 70 or later which would have maximized their monthly benefit, noted the report.

Additionally, the retirees fear declining health that requires long-term care (37%), losing their independence (32%), outliving their savings and investments (32%), and cognitive decline, dementia, or Alzheimer’s (28%).

Fear of unanticipated costly long-term care

Only 13% of retirees are very confident they would be able to afford long-term care, if needed – and only 13% have long-term care insurance, noted the findings. When asked if their health declines and they need help with daily activities and/or nursing care, almost half of retirees (48%) say they plan to rely on family members and friends to provide such care. Moreover, relatively few retirees have codified their wishes in legal documents such as powers of attorney and advance directives.

Annual Income

The survey respondents had an annual household income of $55,000 (estimated median) as of late 2023 with more than one-third of retirees (36%) having an income of less than $50,000. Retirees’ household savings excluding home equity were $71,000 (estimated median) in 2023.

Untapped opportunities might be helpful to retirees in strengthening their finances.The researchers say that retirees need to be fully engaged in financial planning or taking steps that could improve their overall situation. Only 24% indicate they have “a lot” of working knowledge about personal finance, 19% have a financial strategy for retirement in the form of a written plan, and just 7% frequently discuss saving, investing, and retirement planning with family and close friends. Only one in three (33%) use a professional financial advisor.

“Many retirees may wonder what they could have done differently to save and plan for retirement, and many may feel they have done everything right but still came up short,” said Collinson. “In reality, over their working careers, the world has changed, the retirement landscape has evolved, and the need to self-fund a greater portion of one’s retirement income has intensified.”

Thoughts about Retirement in the Ocean State    

“I can confidently say there’s less road ahead to retirement than there is behind me,” quips Kemal Saatcioglu, Ph.D., associate professor and chair of the Economics and Finance Department at Rhode Island College (RIC). “Going through this report was an eye opener even for me and I came away with a mix of inspiration, awareness, and a sense of urgency,” he says.

“Asnoted in this report, the retirees’ ability to find purpose, freedom, and joy, even amid challenges shows the resiliency and flexibility we all possess, notes the RIC Professor.  “Knowing that many retirees successfully navigate these waters is inspiring and is a motivator for getting into retirement planning with confidence,” he adds.

According to Saatcioglu, the report is a wake-up call for retirees. The data clearly indicates that they, in general, can be better prepared.  “The statistics about limited savings, reliance on Social Security, and the lack of written financial plans might push those of us nearing retirement to re-evaluate our financial readiness. The survey data will likely create motivation to consult a financial advisor to ensure better use of available resources,” he says. 

Saatcioglu calls the points about life expectancy and the length of retirement striking. “While it may be daunting at first to consider how 15 to 20 years could stretch retirement savings, prioritizing strategies for sustainability, such as long-term care insurance or budgeting for healthcare costs are great steps to take,” he says, especially the importance of mental health and stress management also encourages a more holistic view of our overall well-being.

Retirees must recognize local challenges and strengths. “Granted Rhode Island is not the most retirement friendly state. Higher costs of living, especially on housing, utilities, and food, and less than a friendly tax environment are challenges but knowing about them ahead of time and taking steps early on can mitigate those challenges,” recommends Saatcioglu.

Finally, Saatcioglu believes that the survey creates a motivation to take action—whether it’s updating financial plans, discussing retirement goals with family, or exploring community resources. Retirement can be an exciting, and rather long, stage of life, as long as proactive steps are taken now.

Maureen Maigret, Policy Advisor for the Senior Agenda Coalition, notes that the findings of the Transamerica report align with what older Rhode Islanders are concerned with in terms of their economic security, especially the  cost of healthcare and housing, worries about being able to afford any needed long-term services and a lack of planning to meet those need.  “Adding to those worries is uncertainty about possible proposed changes from a new federal administration for two of the most valuable programs for older adults – Social Security and Medicare,” she says.

According to Maigret, the Senior Agenda Coalition of RI (SACRI) has advocated to enhance the economic security of older Rhode Islanders.  She stated that a recent SACRI survey found the costs for health care and housing were priority issues for the state’s older population.  “That’s why we will continue to work in 2025 to expand the Medicare Savings Program to increase its income eligibility so lower-income older adults and persons on Medicare will be able to get their Medicare Part B premium covered and in some cases co-payments,” she says, also stressing the importance of ensurng that the housing bond funds are targeted toward developing more affordable housing options for older adults.  

“I deeply appreciate the insights in this report. It highlights the importance of proactive retirement planning and the emotional and financial complexities retirees face in the post-pandemic economy,” says Josh Wells, CEO of The Retirement Factory, who stresses the importance of balancing the emotional and financial aspects of retirement.

According to Wells, retirees often feel the weight of navigating Social Security decisions or managing healthcare costs. This report underscores that many retirees are unsure about these critical choices, with only 7% frequently discussing retirement planning with family or friends and just 33% using a financial advisor. ”It’s a powerful reminder that education and open dialogue are key to achieving retirement confidence,” he says.

“Rhode Island retirees exemplify resilience and adaptability in the face of change,” says Wells.  “The report highlights that 70% of retirees feel confident about maintaining a comfortable lifestyle, even amidst financial and health challenges. For Ocean State retirees, this confidence is bolstered by state-specific benefits such as the ability to exclude up to $20,000 of retirement income from state taxes for those at full retirement age and meeting income thresholds, as well as property tax relief of up to $600 for eligible seniors with limited incomes,” he says, noting that these program reflect “the state’s commitment to supporting its senior population, enabling retirees to plan carefully, stay connected to their communities, and enjoy a fulfilling retirement.”

Like the report’s findings, RI retirees are juggling competing financial priorities, especially with only a minimal 2024 increase in their ERSRI pension, says Sandra Paquette, representing the Advocates for Cost of Living Adjustment (COLA) Restoration and Pension Reform. Of equal, often ignored significance, these retirees have been deprived of 13 years of potential savings,” she says.

“By unjustly removing a COLA, the former teachers, state workers and some municipal employees  have been plunged into survival mode, where limited, fixed incomes are barely sufficient to cover necessities and essentials. In many instances, choices must be made among prescriptions, heating and food– by individuals who spent a lifetime of service, and of contributing  to their retirement benefits,” adds Paquette.

For a copy of Transamerica Center for Retirement Studies’ new report, go to https://www.transamericainstitute.org/research/publications/details/retiree-life-in-the-post-pandemic-economy-2024.

Advocates call for Governor to reject budget cuts they say would harm older adults

Published in RINewsToday on Oct. 28, 2024

As the state’s Office of Management and Budget (OMB) holds its Revenue & Caseload Estimate Conference to discuss the economic and revenue outlook for the upcoming legislative session, the Senior Agenda Coalition of RI (SACRI) warns of “onerous budget cuts” proposed by state agencies overseeing programs and services for Rhode Islanders. At press time, the state’s Medicaid and the Office of Healthy Aging offices proposed 7.5 percent budget cuts to be included in the upcoming fiscal year 2026 budget. 

“It is unconscionable that at a time when our older population is growing – projected to reach one out of every four Rhode Islanders in a few years — to propose budget cuts for programs proven to keep them healthy and safe and that in the long term can save taxpayers money,” says SACRI Board Chair, Diane Santos.

According to Santos, the requests put forward by the Office of Healthy Aging (OHA) include a reduction in state funds for the Meals on Wheels home-delivered meals program projected to cause 13,000 fewer meals to be delivered to persons unable to shop and prepare meals; cuts in funding for local Senior Centers and programs for older adults; elimination of grants to provide security services in elderly housing; and decreased funding to support the Elderly Transportation program. 

Santos warns that proposed changes in Medicaid eligibility guidelines are projected to cause hundreds of vulnerable older adults and persons with disabilities to lose state Medicaid coverage for their nursing home care and cause nursing homes, many of which are already struggling financially and face critical worker shortages, to lose millions of dollars if implemented. In addition, changes in the Medicaid CNOM (Costs Not Otherwise Matchable) program could reduce federal dollars that match state funding and impact hundreds of persons receiving home care and adult day services that help keep them living at home, the proposed cuts could result in greater spending in other areas.

For example, says Maureen Maigret, SACRI Policy Advisor, “Brown University researchers have shown that funds spent on home-delivered meals can delay or even prevent costly nursing home care.”

Over the years, Maigret noted that SACRI has worked to boost state funding to communities to assist them to operate local senior centers and programs. These serve hundreds of older adults and families across the state with a wide range of programs that keep older adults healthy, informed and connected to their communities, she noted.

SACRI has called for the state’s budget to provide ten dollars for each person aged 65 and over to Rhode Island’s 39 cities and towns, says Maigret, calculating that this amounts to about $20 per older adult. “The proposed cuts now being considered fail to recognize the increased need for these services due to the significant growth of our older population,” says Maigret.

Drawing a line in the sand

At press time, SACRI and its partners delivered a letter to Gov. McKee urging him to not balance the state budget on the back of Rhode Island’s older adults, stressing that the “potential ripple impact on families will be significant.

“Nonprofits and those who will be impacted need to know that SACRI and its partners are closely watching this process and are ready to advocate to protect programs and services which may impact our varied constituencies,” says Carol Anne Costa, SACRI Executive Director.

Costa continued, “The fastest growing demographic in RI is people over the age of 65. That is an obstinate fact. And cuts to the budget must be re-prioritized.” The Office of the State Ombudsman agreed, “If anything, OHA should be getting an increase, as they manage to complete all of their obligations on a shoestring budget. And kudos to Maria Cimini and her team at OHA for the outstanding work they do,” says Kathleen Heren, the RI Ombudsman.

Costa noted that OHA is Rhode Island’s designated state unit on aging. It serves as the chief advocate for older Rhode Islanders, adults living with disabilities, and family caregivers. “Prioritizing reductions in spending in areas not directly tied to OHA’s core mission or that would not harm vulnerable older adults and persons with disabilities dependent on Medicaid to meet their long-term care needs is clearly a place to start [in determining budget cuts]. Administrative expenses and the millions of dollars being paid out to consultants could be heavily scrutinized for budget reductions,” she says. 

Adds Mirelle Sayaf, Executive Director of Ocean State Center for Independent Living (OSCIL), “The proposed budget cuts pose a serious threat to the mission of the OSCIL, which is dedicated to supporting individuals with disabilities. Reducing funding, along with changes to Medicaid eligibility and essential programs, will harm those we serve. These cuts jeopardize vital services such as home care, nutritional support, and community engagement initiatives that empower individuals to live independently and maintain their quality of life.”

“Cutting the budget for the OHA when its resources are already extremely stressed to fully meet the needs of a growing older population is unjustified,” charges SACRI’s Maigret, who is also a former Director of the Department of Elderly Affairs.”

Maigret also opposes changes to Medicaid eligibility after advocates have spent years to ensure persons in need of long term supports and services have access to a range of affordable options, and avoidance of long wait lists for service. She calls for increasing resources to the Rhode Island’s cities and towns to help them support local programs for older adults and increasing eligibility for the Medicare Savings Program so lower-income persons on Medicare can afford needed healthcare.  But, Maigret also says that housing needs of older adults must be considered when allocating housing funds.

Food & Shelter important, too

Gerontologist Deb Burton, Executive Director of RI Elder Info also has some thoughts about the state’s proposed budget cuts.

“Cuts to Meals on Wheels that cause our most vulnerable, at-risk, elders to go hungry are simply unconscionable. Taking meals away from our elders cannot happen,” says Burton.

“We must bring back the housing stabilization unit for older adults. Older adult homelessness has increased more than 400% since COVID hit and rents skyrocketed. Rising housing costs, fixed incomes, and wait lists of 2-8 years for affordable elderly housing have all contributed to this crisis. In addition to these challenges, the application process for getting an apartment is onerous and nearly impossible if one does not have access to the internet,” adds Burton.

Eviction prevention is critical in addressing the elder homelessness issue, says Burton, noting that private sector partnerships and philanthropic donations can support a housing stability unit for older adults, ensuring sustainable funding for eviction prevention programs.

“We must find the strength and compassion to provide the funding necessary for food and shelter for our most vulnerable friends and neighbors. If we don’t, what does the future hold for ourselves?” asks Burton.  

A Final Call

“The November Revenue and Caseload Estimating Conferences will provide updated projections to inform budget development which will help set priorities. However, RI’s most vulnerable and fastest growing demographic must be prioritized in finalizing the FY2026 budget,” urges Costa.

Costa takes helm of SACRI, Crafts Vision for Upcoming Conference

Published in RINewsToday on September 9, 2024

The Senior Agenda Coalition of Rhode Island (SACRI), an independent and diverse coalition of over 20 agencies and individual members who advocate for older Rhode Islanders, gears up for the planning of its 16th Annual Conference and Expo with the recent appointment of its new Executive Director, Carol Anne Costa.

Bringing a Wealth of Experience to SACRI

According to Diane Santos, SACRI Board  Chair, Costa brings a wealth of experience from her positions in the Raimondo administration and most recently as the Constituent Service Coordinator for the Rhode Island Office of Attorney General. Her institutional knowledge at the state and federal levels gained in her past positions in the Rhode Island Judiciary, as well as Executive Director of National Utility Contractors of RI (NUCARI) and her managerial role at the Johnston Housing Authority, is a great asset.

“Most importantly, Carol is passionate about helping others, not only through her work but also through her volunteerism in the community. This commitment is exemplified by her serving on many Boards and committees, most notably as a member of the Board of Directors of Wiggin Village for the past 20 years,” says Santos.

The conference will bring together important voices: people from across the state together with the politicians who serve their interests at the levers of power, says Costa. “To achieve progress on any issue the participation of decision makers along with those they represent is the best way to meet budget, legislative and policy goals,” notes Costa.

SACRI Conference is Just a Month Away

In July, Costa stepped into the role of managing SACRI’s upcoming annual conference, “A Bridge to a Secure Future,” to be held on October 9, 2024, from 7:30 a.m. to 12:00 noon, at the Warwick-based Crown Plaza.  This major task remains on her desk as do many of the other tasks to move the organization forward to prepare for the upcoming General Assembly session.

We must embrace the future and respect the past,” says Costa, in developing strategies to advocate for legislative proposals that enhance the lives older persons.

 “My goal is to fill the ballroom at the Crowne Plaza to capacity with older Rhode Islanders, aging advocates, partners and coalition members to educate them about legislative proposals that SACRI supports during next year’s legislative session.

According to Costa, the conference theme, “A Bridge to a Secure Future,” focuses on the kitchen table issues facing older adults and adults with disabilities: economic security, healthcare, and housing. Presenting the keynote address is US Senator Sheldon Whitehouse who will be followed by a panel including US Congressman Seth Magaziner, RI Attorney General Peter F. Neronha and Housing expert, Julie Leddy, she says.

“The conference will be informative and opportune.” said Costa, noting that SACRI’s mission is helping to better the lives of older Rhode Islanders and adults with disabilities and the conference helps us to expand our outreach into the community.

“Empowering people by giving their voice to pertinent issues is something I value, and this conference is the perfect way to begin my tenure at the helm,” she continued.

“In Rhode Island, the healthcare system is under great stress. Older Rhode Islanders face a system rife with worker shortages, long wait times and a dwindling pool of doctors. Solving these problems requires the voices of our coalition and its partners to bring attention to them and the impact they have on people,” said Costa.

In speaking about housing issues, Costa noted, “The housing situation in the state is at a crisis point where new stock is virtually nonexistent and underfunded agencies tasked with building, managing, and easing rental spikes are the only bulwark to help ordinary folks.”

But the big question which looms is will the monies allocated for new development be proportionally distributed, particularly for our older adults as threats to Medicare and Social Security at the federal level compound the stress they feel?” asks Costa.

“This advocacy work is in my DNA, and I am enjoying every minute of it,” says Costa, stressing that she looks forward to moving SACRI forward to accomplish its legislative and policy goals that will impact Rhode Island’s older population.

“And I would be remiss if I did not ask everyone to join us on October 9, 2024,” she said.

Building on Last Year’s  Success

Looking back, over 300 people attended last year’s conference, says Maureen Maigret, SACRI’s Policy Advisor, who assisted its Board members to organize the 2023 conference.  After educating the attendees, the coalition mobilized its troops composed of older Rhode Islander, aging and health care organizations, educators, unions, and Medicare insurance providers to push for change. “

How did that conference impact SACRI’s lobbying efforts?

“Last year’s legislative agenda reflected policy issues discussed by the keynote speaker and panelists at the conference,” noted Maigret, a former Director of the State’s Office on Aging.   According to Maigret, SACRI’s lobbying efforts resulted in the General Assembly enacting SACRI’s legislative priorities that included increasing home and community service provider rates, increasing funding for the state’s senior centers and the streamlining of zoning requirements for the building of Accessory Dwelling Units.  Lawmakers also put a $120 million housing bond program on the November ballot, she said.

“Feedback from Conference attendees about the presentations was excellent and they liked the variety of exhibitors, too,” says Maigret, noting that some participants did say they would have liked more time to ask questions to the presenters. This year’s conference does build in additional time for Q&A, she adds. 

Maigret says SACRI’s Board took charge in organizing the successful event.  This year, Costa and her Board continue its efforts to organize and prepare for the upcoming legislative session, she says.

The cost of SACRI’s upcoming conference is $25.00 per person for Members and $35 per person for nonmembers.  And any organization who wishes to exhibit their work at the Expo, the tables are $350.00. To register go to  https://senioragendari.org/2024-conference-and-expo.

For more details about SACRI, to https://senioragendari.org/.