Researchers sound the alarm over finances of ‘forgotten middle’ older adults

Middle-income Americans who are 75 and older are at serious risk of a retirement crisis, according to a new research brief from the National Opinion Research Center (NORC) at the University of Chicago.

“Our cumulative research has projected an impending crisis without a clear policy solution: a majority of middle-income older adults will be unlikely to afford needed care and housing in the next decade, potentially challenging their ability to age with dignity, choice, and independence,” the researchers stated.

Financial disparities are also varied across a series of racial and ethnic groups, the researchers found. Cohort members who are also people of color typically face larger disparities than their white counterparts. In 2020, people of color represented about 12% of the middle-income older adult population in the U.S., a figure that is expected to more than double to 25% by 2035.

“The largest shift in composition is among Hispanics, who will comprise nearly 11 percent of the middle-income group in 2035 — nearly a three-fold increase from 2020,” the researchers found.

Compounding the concerns about housing this population could face are the kinds of assets that older, middle-income people of color typically have.

“Black and Hispanic older adults tend to hold fewer liquid assets than white older adults,” the brief states. “Holding fewer liquid assets makes it more difficult to access the housing and care options that align with their preferences.”

For this analysis, researchers examined the asset portfolios of middle-income older adults. They found that those “who do not qualify for Medicaid often must rely on other sources of income, such as pensions or retirement accounts, to afford the care and housing options they need or want.”

Having more liquid assets could make housing and health care easier and more affordable for them, but that’s not necessarily an easy transition for many to make — especially among people of color, the researchers found.

“33 percent of Black and Hispanic older adults’ asset portfolios comprise transportation items like a personal vehicle,” the brief said. “Liquidizing a vehicle is both inconvenient and impractical as it eliminates a source of independence in a society increasingly dependent on private vehicle access.”