From the Midwest redneck author of "The Rooster Crows at 4am!," "Lizard Poop!," and "The Philippines Expat Advisor"
We’re Living Below the US Poverty Level in the Philippines
My wife and I are living below the United States poverty level of $15, 130 a year for two people. Now if we were not living in the Philippines, that would be a problem. While we are enjoying a comfortable lifestyle we certainly are not living like a king and queen, but we're content. (Yeah, I know the photo has absolutely nothing to do with this topic, but what would you rather see, a mugshot of an old geezer like me, or this cute Filipina on the beach?)
We'll be more content when I turn 62 (less than 2 years away), and I start collecting Social Security. Our income will more than double. We'll be living like a Prince and Princess in the Philippines. But back in the States, we would be just be getting by even when Social Security kicks in.
But thanks to an article brought to my attention by Lance the Canadian, I was made aware that a growing number of Americans are also spending their retirement years in poverty.
A recent Employee Benefit Research Institute study, as reported on Yahoo!Finance from US News & World Report, stated that the proportion of older people living below the poverty line has been growing steadily since 2005. Many of those folks are falling into poverty as they age and spend down their savings.
Poverty rates for those 65 to 74 climbed 7.9 percent in 2005 to 9.4 percent in 2009. For older retirees ages 75 to 84, the study reveals an even steeper increase from 7.6 percent to 10.7 percent.
It's the oldest retirees who are the most likely to live in poverty: 14.6 percent did so in 2009. Many older Americans are falling into poverty as they age. In 2009, the most recent year to be included in the study, 6 percent of those age 85 and older were new entrants in poverty, up from 4.6 percent in 2008. And while 3.3 percent of people ages 75 to 84 fell newly into poverty in 2005, that number increased to 5.6 percent by 2009.
The article goes on to reveal that one of the biggest drivers of poverty in old age is failing health and the associated medical costs. Most retirees living below the poverty line (70 percent) have suffered acute health conditions such as cancer, lung disease, heart problems, or stroke, compared with 48 percent for those above the poverty line.
Almost all senior citizens living in poverty (96 percent) have some sort of health condition, such as high blood pressure, diabetes, psychological problems or arthritis, versus 61.7 percent of retirees with incomes above the poverty line.
"Medical expenditures go up for the elderly as they age and medical expenses have been rising over the past decade very rapidly," says Sudipto Banerjee, a research associate at EBRI and author of the report. "A lot of people have to move to nursing homes, and nursing homes are very expensive. People who live there, they lose their income and assets very quickly."
Many people also spend down their retirement savings too quickly, especially during recessions. "As people age, personal savings and pension account balances are depleted," says Banerjee. "Also, the rising poverty rates noted correspond to the two economic recessions that occurred during the last decade. I would expect that as the economy does better, the rates will go down."
Once you have spent your nest egg, your only remaining source of income is likely to be Social Security. I was fortunate to have a good paying job at AT&T, my employer of almost 30 years, and thus will have a decent income from Social Security since payments are based on your earnings during your 35 highest earning years in the workforce.
A recent post I did, "More Older Americans Working, Why Not Retire to the Philippines?, along with this latest report, makes me believe that my asawa and I made the right decision in moving to the Philippines.
Now as the article reported, more health issues occur as we age. If you're considering a move to the Philippines and already have some medical problems, you might be concerned about the quality of health care you would receive in the Philippines versus the United States. That's a legitimate issue that I'll be exploring in a future post.
I will report that my wife and I have had occasion to visit different hospitals and health care clinics while residing in the Philippines. We have found them to be on a par with facilities back in the States for the most part. I'll get into more detailed information and what possible health insurance options are available to you in that aforementioned future article.
But why not consider retiring to the Philippines? Think you can't do it? My eBook, "Expat Guide to the Philippines" can help. A person can live a lot cheaper in the Philippines and enjoy a good quality of life. Again, I'm glad we made the move. If you want a fresh start in life, come on over. I can guarantee, you won't be bored. It's an adventure.