Income Sources

Income and income sources for older adults differ according to age. Although income generally decreases with age, net worth peaks among householders ages 65 to 69. However, even though net worth decreases with advancing age, it remains substantial in older age groups. The median income of older adults in 2007 was $24,323 for men and $14,021 for women. Median money income (after adjusting for inflation) of all households headed by older adults did not change in a statistically different amount from 2006 to 2007. Households containing families headed by persons older than 65 reported a median income in 2007 of $41,851, according to “A Profile of Older Americans: 2008” (Administration on Aging, 2009).

In 2006, Social Security was the primary income source for 89% of Americans older than 65. This federal government package of protection provides benefits for retired individuals, survivors of participants, and the disabled. Funds for Social Security are derived from payroll taxes, and benefits are earned by accumulating credits based on annual income. A person can earn up to four credits a year by working and paying Social Security taxes. In 2006 about 55% of older persons also reported income from other assets, and 29% of older adults reported private pensions. Government employee pensions were reported by 14%, and additional wages were reported by 25% of all older adults in this national survey by the U.S. Bureau of the Census, National Center on Health Statistics, and the Bureau of Labor Statistics (AOA, 2009).

Retirement age in the United States is not mandatory but is usually around age 65. A person can begin receiving Social Security retirement benefits as early as age 62. However, if a person begins receiving early benefits, monthly payments will be lower. Those born before 1938 are eligible for full Social Security benefits at age 65. However, beginning in 2003 the age at which full benefits are payable began increasing in gradual steps from 65 to 67 (Table 7–1). For those who wish to delay retirement, the benefit increases by a certain percentage depending on the year of birth. The yearly rate of increase varies from 3% for those born before 1924 to 8% for those born in 1943 or later (Retirement, 1997).

Generally speaking, Social Security earnings are limited if retirement is taken at age 62 or before the age of full benefits, unless the beneficiary is disabled or has special circumstances. The purpose of the program is to provide continuing income to a retired worker.

Very poor older adults depend on another federal government program. Supplemental Security Income (SSI) pays monthly checks to persons who are aged, disabled, or sight impaired and who have few assets and minimal income. This program is also regulated by the Social Security Administration, but the money to provide benefits is from income tax sources rather than Social Security payroll taxes. Eligibility depends on income and assets. Additional information is obtainable through the government’s internet site www.socialsecurity.gov.

Poverty

The following information looks at poverty at various times over the past 20 years. Because the 2010 Census reports are not due to be published until 2011 or 2012, updates to all statistics quoted here can be found by checking with the U.S. Government Bureau of the Census monthly.

In 1996 almost one fifth (18.4%) of those age 65 or older were classified as poor or near-poor, with income between the poverty level and 125% of this level (American Association of Retired Persons [AARP], 1997). One of every 11 older white adults (9.4%) are poor compared with one fourth (25.3%) of older black adults and one fourth (24.4%) of older Hispanic adults. The poverty rate for older women is 13.6%, whereas the rate for older men is 6.8%. Almost half (47.5%) of older black women who live alone are poor. The poverty rate is also high for those who live in metropolitan areas or the South, have not completed high school, or are too ill or disabled to work (AARP, 1997; US Census Bureau, 2004–2005). Asians and other racial/ethnic groups were not included.

Older black and Hispanic adults are more vulnerable to poverty than are whites. Many are more likely to have held low-paying jobs with few or no benefits. Black Americans older than 55 years are less educated as a group. Few reports of other racial/ethnic groups are available during this reporting time (US Census Bureau, 2004–2005). Educational attainment of older adults in general is identified in Table 7–3. The U.S. Census Bureau is planning an aggressive campaign to encourage all racial/ethnic groups to fully participate in the 2010 Census. This will allow all Americans access to government programs.

Low income may affect the quality of life for older adults. For example, basics such as housing and diet may be inadequate. An aging wardrobe and lack of transportation may cause the older adult to avoid social contact, leading to isolation. Older adults may delay seeking medical help or may not follow through with the prescribed treatment or medications because of limited income. Eyeglasses, hearing aids, and dental work may become unaffordable luxuries. Identifying an older client’s income level enables the nurse to direct the client to agencies and services that are available to those with limited resources (see Fig. 7–1A and Fig. 7–1B).

Education

Education has been shown to have a strong relationship to health risk factors (Brown, 1995). The level of education influences earning ability, information absorption, problem-solving ability, value systems, and lifestyle behaviors. The more educated person often has greater access to wellness programs and preventive health options (Land et al, 1994).

The educational level of the older population has been steadily increasing, reflecting increased mandatory education and better educational opportunities in the last 50 years. The percentage of individuals who completed high school varies by race and ethnic origin. In 1995, 67% of older white adults had completed high school compared with 37% of black Americans and 30% of Hispanics (AARP, 1997; US Census Bureau, 1996). The educational level may be seen to rise even further after new data are gathered from the 2010 Census Report.

Many older adults continue their education in their later years. From 1994 to 1995, 15% of those older than 65 participated in adult education courses (US Census Bureau, 1996). Some were completing high school or taking college courses. High school equivalency programs and reduced college tuition fostered this trend. Others took advantage of continuing education programs such as Elderhostel to explore subjects of interest. The Elderhostel program offers opportunities for persons older than 60 and their spouses to attend courses on specific topics, often held in 1-week segments on college campuses throughout the world. Low costs, made possible by volunteer professional instructors, on-campus housing, and other cost-saving factors, make the programs available to many.

Seeking educational opportunities in later life has many benefits for older adults. Lifelong learning promotes intellectual growth, increases self-esteem, and enhances socialization. Older adults have an opportunity to stimulate creativity and to remain alert and involved with the world.

Erikson’s seventh stage of development stresses how important generativity versus stagnation is to the individual’s sense of achievement and fulfillment in life (Cox, 1986). Education provides an opportunity to avoid stagnation and isolation and adds to the enjoyment of later life. Teaching older adults with disabilities can be a challenge for nurses when the teaching is a part of health education. See Box 7–2 for suggestions related to the learning environment of those with memory, vision, or adherence issues.

Health Status

The health status of older adults influences their socioeconomic status. Persons older than 65 have an average of two chronic conditions (Lorig, 1993). The most common chronic problems in 2002 were arthritis (50%), followed by hypertension (36%), heart disease (32%), hearing impairments (29%), cataracts (17%), orthopedic impairments (16%), sinusitis (15%), and diabetes (10%) (US Census Bureau, 2004–2005). The influence health problems exert often depends on the older person’s perception of the problem. Among noninstitutionalized persons, 74.3% of those ages 65 to 74 consider their health to be good, very good, or excellent compared with others their age, as do 66.8% of those 75 or older (US Census Bureau, 1996). Some approach health problems with an attitude of acceptance, whereas others find that chronic problems require considerable energy, and they spend extensive time and resources finding ways to cope or adapt (Burke & Flaherty, 1993).

Functional status is affected by chronic conditions. The Centers for Disease Control and Prevention (CDC) reports in Healthy Aging for Older Americans (2004) that functional status is important because it serves as an indicator of an older adult’s ability to remain independent in the community. Functional ability is measured by the individual’s ability to perform ADLs and instrumental activities of daily living (IADLs). ADLs include six personal care activities: eating, toileting, bathing, transferring, dressing, and continence. The term IADLs refers to the following home-management activities: preparing meals, shopping, managing money, using the telephone, doing light housework, doing laundry, using transportation, and taking medications appropriately. Data concerning the ability to perform ADLs and IADLs were gathered through the National Health Interview Survey. For more information on chronic conditions and their impact, see Chapter 17.

Nurses can work with older adults to prolong independence by encouraging self-management of chronic conditions. Self-management is defined as learning and practicing the skills necessary to carry on an active and emotionally satisfying life in the face of a chronic condition (Lubkin & Larsen, 2002). Education and support help older adults make informed choices, practice good health behaviors, and take responsibility for the care of a chronic condition.

The amount of money available for food, shelter, clothing, and recreation can be greatly affected by the cost of medication, health care equipment, glasses, hearing aids, dental care, medical care, home care assistance, and nursing facility care, some of which may not be covered by insurance programs. In addition, the insurance premiums themselves may cause financial distress. Restricted finances can affect the safety of an older adult’s environment and his or her nutritional status and social opportunities, which can result in an altered quality of life.

By making older adults aware of programs such as equipment loan programs, as well as optical, auditory, and dental assistance programs, the nurse can help them receive services necessary to maintain their health status, thus maximizing their quality of life even though finances are restricted.

A comprehensive service delivery system built on capitated benefits through Medicare and Medicaid funding is called the program of all-inclusive care for the elderly (PACE). The program is a state option under Medicare with additional funding from Medicaid; participants can receive services at home rather than be institutionalized. All services are delivered through an interdisciplinary team of health care and social services members. Full financial responsibility is assumed by the providers of care regardless of the duration of care, amount of services used, or the scope of services provided. Because no deductibles, coinsurance, or other cost-sharing is done, the older adult must be certified eligible for nursing home care, be older than 55, and receive both Medicare and Medicaid (Center for Medicare and Medicaid Services [CMS], 2006).

Insurance Coverage

Older Americans should review their insurance coverage often to determine whether the coverage they have is necessary, appropriate, and adequate. Residential insurance purchased several years ago may be inadequate today. For example, home insurance should cover at least 80% of the replacement cost; however, many older adult homeowners are insured for the assessed value of the home when it was purchased. Content and liability coverage may also be inadequate. Older homeowners may be unaware that policies are outdated, or they may not be able to afford the premiums an update would require. An insurance checkup would reveal inadequacies. Older adults may wish to investigate several insurance companies to find the best coverage for the least cost.

Many older adults have automobiles that have reached maximum depreciation. These automobile owners may still be carrying full coverage when all they need is liability insurance. They may also be able to save money by investigating senior discounts, choosing higher deductibles, and comparing premiums from several companies. Completion of a defensive driving course such as the AARP Driver Safety Program (2005) may help older adults qualify for lower insurance rates.

Life insurance is valuable when providing for dependents. In old age the primary reason for life insurance is to cover burial expenses. A single-term policy would accomplish this purpose. Many older adults can substantially reduce life insurance coverage. Proceeds from those policies and premium payments that are no longer due may be redirected for greater benefit.

Health insurance is a necessity for older adults because medical problems—and therefore medical expenses—increase with age. As persons age, they visit the doctor more often (US Census Bureau, 2004–2005). Older adults spend more time in the hospital—an average of 6.8 days—compared with the average of 4.5 days spent by those younger than 65 (AARP, 1997; US Census Bureau, 2004–2005).

Medicare is a federal health insurance program for persons older than 65 or persons of any age who are disabled or who have permanent kidney failure. Medicare has several parts to provide multiple benefits to older adults.

Part A, the hospital insurance, helps pay for inpatient hospital care and some follow-up care such as a skilled nursing facility, home health services, and hospice care. A person is eligible for Medicare Hospital Insurance if he or she is age 65 or older and (1) is eligible for any type of monthly Social Security benefit or railroad retirement system benefit or (2) is retired from or the spouse of a person who was employed in a Medicare-covered government position. It costs nothing for those who contributed to Medicare taxes while they were working. If the person is not eligible for premium-free Part A, then a monthly premium can be paid, as long as the person meets citizenship or residency requirements and is age 65 or older or disabled. The 2010 premium amount for people who buy Part A is $461 each month (Medicare & You, 2010).

Part B is the medical insurance coverage. Most Medicare recipients pay a supplemental premium that is deducted from monthly Social Security payments. In addition, they pay an annual deductible on hospital and skilled nursing care benefits.

Part B, the medical insurance, helps pay for (Medicare & You, 2010)

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