Health And Retirement

What does retirement look like for the average American?

Financially: 

Many Americans are going to be unprepared for retirement. The recent economic downturn has taken a toll on many Americans' financial health, with many 40-year-old's nearing retirement age and finding that they'll need at least 70% of their salary in order to have a comfortable retirement. This is a hefty price for someone who may be used to living off of only 50% of their salary.

Socially:

Retirement can also mean the loss of friends through moving or passing away. It can also mean losing contact with one's children through divorce and no longer having access to grandchildren unless one is living nearby or visits often. 

As a result of the above, many people feel isolated in their retirement years. Physical exercise and socialization are key to building relationships once one becomes an older adult. 

Spiritually: 

Retirement can also mean the loss of one's faith. According to a study conducted by the National Study on Religion and Retirement, 89% of those with no religious affiliation felt that they had lost their faith during their retirement years. 

What does retirement look like for Americans with disabilities?

The second part of this series will address the challenges faced by disabled American's as they transition to retirement. As we have already seen, this transition can be difficult for all Americans, but it is exponentially difficult for those with disabilities. The difficulties begin with finding a job and continue with the many challenges that face a disabled person living independently.

The most recent data from the Bureau of Labor Statistics shows that those with disabilities have an unemployment rate of 22.1%, which is 4 times as great as those without disabilities (5.3%). These numbers include people who have been out of work for at least one year, and even so, it is still four times as high as those without disabilities. To put this into perspective, the unemployment rate during the Great Depression was 25%. In addition to unemployment being high for disabled individuals, their wages are also lower than non-disabled individuals. According to the U.S. Bureau of Labor Statistics, disabled American's earn $8,400 less per year than non-disabled individuals. In addition to lower wages, they also have fewer opportunities for promotion and advancement in their careers, as well as a lack of benefits and paid time off (which makes it more difficult to obtain backup health care coverage for those with disabilities). 

As one would expect, this greatly impacts a disabled person's quality of life. According to a study conducted by the National Study on Religion and Retirement, those with disabilities feel that their quality of life has declined during their retirement years; 80% reported that their overall quality of life was worse than it had been pre-retirement. Many reported that they were able to participate less in activities, and felt older than their years.

As a result, many disabled people turn to Social Security Disability as a source of income (Social Security Disability is very similar to SSI). According to an article by the National Disability Rights Network, approximately 70% of those receiving Social Security Disability receive benefits through SSI because "they find it especially difficult and confusing to navigate the procedural labyrinth of the paper application." However, even this can be difficult for those with disabilities; many are not aware that they are eligible for SSI and do not apply. In addition, those who do apply may be rejected due to their disability not meeting all the requirements (such as having a significant medical history).

Another source of income for those with disabilities is Supplemental Security Income (SSI). SSI is an income support program for those who are aged, blind or disabled and earn very little enough to be eligible. According to the U.S. Census Bureau, approximately 3 million Americans receive SSI payments at a total cost of $54.5 billion; this includes payments made to those receiving SSI either as a direct grant or through an individual with no other income. And yet, even this is not without challenges; benefits can be reduced or eliminated if one's daily living expenses exceed certain amounts, has a limited work history and/or does not meet all the requirements (such as having a significant medical history).

According to the SSA, of those who apply for SSI, only "nearly half are denied on the first application." And yet people with disabilities continue to face these challenges because they desperately need the income in order to live comfortably and independently; approximately 37% of SSI payments go towards paying rent and utilities. 

The average monthly SSI payment is only $463.00. This is insufficient in providing for medical and daily living expenses for most disabled individuals. According to Dr. Martha Olney, professor at the University of California, Berkeley (and others), a person living with a disability requires $1000 per month just for basic needs (i.e., food and clothing). This is based on the 60% of federal SSI funds that are spent on basic needs. If one's rent or mortgage payments alone are based on a federal SSI check, the monthly payment will be less than $400.

It is also worth noting that a 50% increase in Social Security benefits can increase an individual's income by only 20%; they remain below the poverty line. In addition, most disabled people must work in order to receive any kind of financial assistance and they choose jobs that do not provide them with adequate income in order to do this.

According to Social Security Administration's Office of the Chief Actuary, it is projected that 21% of those aged 65+ will be disabled in 2050. The Social Security Administration also predicts that 32% (or 4.6 million) of all retired American workers will receive SSI benefits based on disability in 2050. This indicates that by 2050 the disability rate among those receiving SSI will also increase. Therefore, it is expected that the number of beneficiaries on SSI who are disabled will also increase and that the percentage of total retirees receiving SSI benefits will rise significantly as well.

According to the Social Security Administration, approximately 40% of those who are disabled applied for SSI benefits. However, it is important to note that disability rates are higher than actual numbers of applicants. In addition, a small percentage (approximately 1%) make it through the stringent application process and ultimately gain SSI benefits.

The SSA also points out that many disabled Americans do not apply for SSI because they do not believe they should receive any benefits; thus, a large number of people without disabilities also never apply for SSI.

Conclusion:

The greater the number of disabled Americans who have no other source of income, the more likely they will become dependent on income support programs such as Social Security Disability and SSI. This further contributes to a worsening quality of life for these individuals.

Social Security Disability is a program for disabled persons that does not provide sufficient income (although it is necessary in many cases), and one that is far too difficult to navigate through. The requirement increase in disability rates means that more individuals will need to apply for SSI.