Monique Levigny, an event coordinator in the San Francisco Bay Area, saves as much as she can. She drives her 10-year-old Prius, brings a thermos of coffee to her workplace instead of patronizing stores with baristas, and uses her pantry for drive-thru food once a month. I am.
Although she was laid off at age 57, “I felt like I reinvented myself,” she said. She rebuilt her career as a freelancer, and she oversaw receptions and conventions for many companies and organizations, including the local de Young Museum and the Légion d'Honneur.
However, her income last year fell to less than $30,000. “It's unstable,” she said. “I have 12 days of work in January.” In the summer, you may only be able to eat three or four.
Levigny, 64, feels lucky in two ways. For health insurance, we qualify for California Medical's Medicaid program. Two years ago, she paid off the mortgage on a relatively affordable condo in Vallejo. Your housemates will pay your rent, which can cover the rising costs of management fees and condominium fees.
“I think I can last two years professionally,” she said, after which she plans to start collecting Social Security benefits at full retirement age of 66.
Louvigny's income makes her Recent research published in Health Affairs As a lower middle class American nearing retirement. The group has been steadily losing ground financially over the past two decades, with stagnant revenues and fewer economic resources than in the early 1990s.
Studies have found that such losses not only portend a precarious retirement, but also have alarming implications for both health and life expectancy.
On the other hand, the situation for the upper middle class is clearly better.
“There's been a lot of attention to the inequality between the bottom and the top of the income distribution,” said study lead author Jack Chappell, an economist and doctoral candidate at the University of Southern California. says. “We wanted to look at the middle class, where people are suffering.”
Researchers said they found a “tipping point” among Americans in their mid-50s, based on data from the National Health and Retirement Study from 1994 to 2018.
In effect, they are now divided into two middle tiers. One is the safer upper tier (in 2018, he averaged more than $90,000 in annual assets, including income and home equity, retirement savings, and annualized pensions). and an increasingly precarious lower middle class. In 2018, the average annual wealth of people in this group was less than $32,000.
By contrast, in the early 1990s, “our lower-middle-class groups were performing about as well as our upper-middle class'' on measures of health and economic well-being, Chappell said.
No more. Over the past 20 years, the gap between the two has widened further. For example, homeownership rates fell by 5 percent for the upper middle class, but by 31 percent for the lower middle class, of whom only 54 percent owned a home in 2018.
For those still working, incomes for upper-middle class workers increased by 27% after adjusting for inflation, but incomes for lower-middle-class workers fell by 5%. “Their incomes are decreasing, either because of fewer hours worked or lower wages, or both,” Chappell said. They were also much less likely to have health insurance provided by their employer.
Total financial resources, including income, savings, pensions, home equity, public benefits such as social security, expected over a lifetime after age 60 have stagnated for people in the lower middle class, dropping by just 2% over 24 years This increased to approximately $406,000.
However, the total financial resources of the upper middle class amounted to about $975,000, an increase of 26%. (For the richest group, the equivalent amount was nearly $3 million.)
Teresa Ghilarducci, an economist at the New School for Social Research, whose research found that Similar results for middle-income AmericansHe pointed out one of the reasons for the widening disparity. “The house has become a treasure trove of debt,” she says. “Financial institutions have figured out how to extract wealth from homes through refinances and second mortgages, and their methods have become more sophisticated.”
He says that for most middle-income people nearing retirement, their primary source of wealth is not home equity or retirement savings. It's social security benefits.
Particularly stressed are older workers in physically demanding jobs.Report from the American Social Insurance Association's recently convened Retirement Security Task Force for Older Workers It is estimated that there are at least 10 million workers People over 50 belong to that category.
Task force member and AARP policy director Joel Eskovitz said these jobs include “many service-related jobs that require people to be on their feet all day long.” “Retail people, home health workers, janitors. And there are also a lot of jobs related to Amazon and other tech companies, like warehouse work and delivery.” Workers in these jobs are Black, Hispanic, and more. , disproportionately Asian.
Eskovitz said such workers often end up applying for Social Security retirement benefits as early as age 62 because “these jobs aren't jobs you can keep into your 60s.” Stated. Doing so would increase “lifetime earnings” compared to waiting until full retirement age (currently most recipients are at his age of 67) “which would lead to a significant reduction in monthly benefits.”
The disparity between the two middle classes is also reflected in health measures. Among the lower middle class, Chappell says, “smoking rates have barely decreased.” “But upper-middle class people have cut their smoking by about half.”
People with lower incomes have more chronic health conditions and are much more likely to describe their health as fair or poor. (He has one exception: Obesity has increased dramatically in both income groups.)
This also leads to differences in life expectancy. Chappell said: “Everyone is living longer, but the upper middle class is benefiting more and is living out a greater proportion of their remaining years.” He said he had no serious health problems.
Between 1994 and 2018, life expectancy at age 60 increased twice as much for men and women in the upper middle class as for men and women in the lower middle class.
Even people with slightly higher incomes and who are theoretically in the upper middle class can feel anxious. Patricia Thompson, 62, wrote in a Facebook message that she “hopes she can continue her work until at least 65 years old.”
She and her husband live in Hickory, North Carolina, where she earns $53,000 a year as an acquisitions editor for a small newspaper. Her 71-year-old retired husband receives her $1,500 Social Security benefit and withdraws $500 each month from her retirement savings. This is above the 45th percentile of combined household income for married couples.
But they are still paying off their mortgage and car loan, and “I have no pension,” Thompson wrote. “I have very little savings in my later years due to student loans. Where is the safety net for someone like me?”
“Thinking about how to ensure that different groups can live with dignity in retirement is really a big policy challenge,” Eskovitz said.
When discussing raising the Social Security retirement age, policymakers and advocates proposed the following: Numerous measures Strengthen the economic security of low-income people and those forced out of the labor force early.
The Older Workers Retirement Security Task Force is working on a “bridgment'' program that would allow workers in physically demanding jobs to receive a portion of their Social Security benefits early without being locked into reduced benefits for the rest of their lives. It has come up with a long list of proposals, including “benefits.”
Raising the maximum income that is subject to payroll taxes could make Social Security more affordable for everyone.
Mr. Chappell pointed to new Department of Labor programs that include: Retentionassisting sick or injured workers in returning to work and includes on-the-job accommodation, rehabilitation, and retraining.
Levigny thinks that with a few more years of work and being careful with his spending, he'll be fine. “I try not to worry,” she said. “I don't condone that idea.”
