Financial Problems That Are Associated With the Elderly

Due to advances in medical care, better nutrition and generally higher standards of living, more people are living longer. This presents unique challenges in every area of a person's life, but especially when it comes to finances. Methods of saving and planning for retirement used by previous generations no longer work for many older persons today, and much in the economic world has changed since the current generation of elderly persons first began planning for this era of their lives. This creates a myriad of financial problems associated specifically with the elderly.

Healthcare Costs

According to the National Bureau of Economic Research, individuals over the age of 65 spend an average of 35 percent of their income on healthcare costs. Compared to the 6 percent spent by the average American family each year for medical care, this represents a significant change in expenditures that many people simply aren't prepared for. Costs for other necessities, such as housing and food, don't necessarily decrease when a person ages, which simply adds strain to budgets that did not factor in these increased costs when planning for retirement and old age. In addition, this often forces elderly persons to cut costs in other areas, causing problems such as sub-standard living conditions or poor nutrition.

Many younger persons have more financial freedom than elderly individuals simply because their incomes are not necessarily fixed. Pensions or retirement plans (and sometimes only Social Security) often constitute the only monthly income many elderly persons receive. Due to health issues, lack of transportation, or simply an inability to adequately perform certain job functions, many elderly people cannot just pick up a part-time job or find other ways to supplement their incomes. So when prices rise or they incur unexpected expenses, a limited, fixed budget becomes even more limited.

Financial abuse of the elderly constitutes a common problem from which many older persons do not have the resources to recover. The National Committee for the Prevention of Elder Abuse asserts that many elderly persons run the risk of financial abuse because they often experience isolation, loneliness, numerous losses (i.e., deaths of friends/family members, loss of health, moving), and deterioration in their physical or cognitive health. Additionally, many elderly persons experience financial abuse at the hands of relatives, caretakers or other known, trusted people, not from salespersons or other strangers.