Elder Index Tracks Senior Costs to Meet Basic Needs

The coronavirus pandemic has compounded the already significant economic anxiety of older Americans, forcing many to take early retirement and countless others to face unexpected housing or health crises. The Elder Index, developed by the Gerontology Institute at the University of Massachusetts Boston, is a measure of the income that older adults need to meet their basic needs and age in place with dignity. The Elder Index is specific to household size, location, housing tenure, and health status and factors in costs for health care, transportation, food, and miscellaneous essentials. UMB professor of gerontology Jan Mutchler spoke with Spotlight recently about the latest trends the Index is picking up as well as the new challenges older Americans face as a result of the pandemic. The conversation has been lightly edited for content and length.

Why don’t we start with some background on the Elder Index—how did this come about?

The Elder Index actually began close to 15 years ago. The Elder Index began as a pilot, to determine if it was really feasible to calculate a cost-of-living measure for older people. And to be clear, what it is meant to be is a bare minimum cost of living for people. The additional unique feature of the Elder Index is that it is very geographically specific; it is calculated for every county in the U.S. Those are very important innovations and we spent six or seven years getting the methodology right. At the beginning, we were working with a group in D.C., Wider Opportunities for Women, and they were working closely with advocates across the country to really try to use the Elder Index to change people’s ideas about what adequacy looked like. As I’m sure you know, a lot of our understandings about adequacy and sufficiency are anchored around the poverty line, which is not adequate at all for anybody.

So, there was a lot of work at the beginning to get the methodology right and to get people to understand what the Elder Index was trying to do and figure out what are the good ways to talk about adequacy. In addition, we have worked to help advocates and others in the real world actually understand the Elder Index and think about how to use it.

The first time we developed the Elder Index for the whole U.S. was in 2011 and since then we’ve updated it as often as we had the resources to do that. Recently, we’ve been funded by a coalition of funders, led by RRF Foundation for Aging, that has really been terribly helpful and supportive in helping us think about how best to move ahead with the Elder Index. So, we’ve been around for quite a while, but it hasn’t been available for the whole U.S. until fairly recently. And again, we update as often as we can and right now we have 2020 data on the website.

And just to be clear, people can go to the site, plug in their information and see what comes back?

Exactly.

I’m interested in what particular changes you have seen during the pandemic. Are there particular ways that the pandemic has manifested itself in the data that you have?

It’s not manifested in the data as such because the data is always behind big issues like that. But we’ve done a lot of work to explore the sensibilities that the Elder Index brings to us in trying to understand how people’s lives have been impacted, and what are some of the things that we might anticipate happening in the future as a result of the pandemic. The Elder Index really is a cost measure and we know that to the extent that a lot of older people own their homes, those costs may not be changing much. But in many states about 25% of older people are renters and so to the extent that the rental market has been impacted by the pandemic directly, those people are impacted. For some people, their rents may be going up quite a bit.

The other thing that we’ve been writing about is looking at how many people are struggling in relation to the Elder Index and how does that compare to the assessment if we’re going to use the federal poverty line. As you can imagine, we’re seeing that many, many more people are falling below the Elder Index than fall below the federal poverty line, and our work also reflects the geographic variability around that. What we don’t quite know yet is how older people have responded to the financial consequences of the pandemic. There is a lot of speculation and some evidence coming out that some people may have been pushed out of their jobs due to the pandemic and they may have chosen to take early retirement. To the extent that results in their taking a permanent cut in what their Social Security benefits could have been, that would be long-lasting, as well as anyone who might have had to dip into their savings or investments. But the consequences are not yet clear, and I think that’s a wave that we will see coming for a number of years.

And I assume some of those housing impacts will be very different, depending on where you live.

Oh absolutely. Here in Boston, housing is always terribly expensive, but we’re really seeing the impact in the areas outside these big cities where people are moving and the costs are really spiraling. That may also have impacts on property taxes, but I do think it’s going to be unfolding over a number of years.

Are there particular pieces of legislation or things that the Biden administration is doing that you’re watching closely?

Certainly, all the things they’ve done around unemployment have impacted older people who remain working, and these measures have potentially impacted some of their decisions. Other than housing, the big cost for older people in the Elder Index is health care and so anything that they do or could do to expand accessibility to more affordable health care or reduce the cost of health care and medications is going to impact the Elder Index and older people in general.

So, the idea of introducing people into Medicare at 60 would have a major impact?

Theoretically it would, but our data focuses on people age 65 and older. But what it might impact is that we might change the way we do things and start including people 60 and over.

You mentioned at least a certain percentage of older people renting. What about this feared wave of evictions that could hit when and if the federal moratorium is lifted? Is that something that you think could have a significant impact on older Americans?

Certainly. There are many older Americans who live on the edge and they are going to be impacted by that. I will say that when you look at people with very few resources, to some extent older people at least have Social Security most of the time. It may not be a lot of money but it’s a stable source of money. Younger people, when they lose their jobs, they have nothing to fall back on. So, yes, it will impact older people but possibly not to the extent that it impacts younger people.

Anything that you have planned for the Index coming up that we should note?

The latest thing we released was a report on gender differences, which is deeply distressing, as you can imagine. There are big gaps in terms of the economic security of older women as compared to men and huge disadvantages for both women and men in being single as opposed to being in a couple household. Our report also shows that gender gaps become even more pronounced among the very oldest people. What you really see is that once men are 65, their risk of being economically insecure is fairly flat, whereas it goes up increasingly with age among women.