Is the old-age income poverty rate too high in the US? According to the Organization for Economic Co-operation and Development (OECD), around 23% of Americans over the age of 65 live in poverty, ranking the US behind 30 other countries within the 38-member bloc. The average poverty rate among developed nations is 13.1%. Furthermore, the US ranks poorly in terms of old-age “poverty depth” and income inequality among seniors. Several factors contribute to these poverty dynamics, including the overall high poverty rate in the US, the lower base Social Security benefit compared to other OECD nations, and the absence of mandatory work credits for parents during maternity leave. While there is some debate about the severity of old-age poverty due to measurement differences, certain groups of the elderly population, such as widows, divorced women, and never-married men and women, remain vulnerable to poverty. Two major problem areas persist – the impending Social Security funding shortfall and the limited access to workplace retirement plans. Experts suggest that raising Social Security payouts for lower-income individuals could alleviate old-age poverty, but this would come at a substantial cost. Additionally, addressing the coverage gap and increasing access to workplace retirement plans could help individuals accumulate more retirement wealth.
The Poverty Status of U.S. Seniors within the Developed World Varies Depending on Data Utilized
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