Businessweek Archives

...But The Elderly Are Getting Walloped Twice


Economic Trends

...BUT THE ELDERLY ARE GETTING WALLOPED TWICE

Even as senior citizens watch the rates paid on their savings accounts go down, they face another whammy: a higher rate of inflation than other Americans. Medical costs are the big culprit. People over 65 spend 13% of their income on medical care, compared to less than 5% for households headed by people aged 35-44, according to a recent Bureau of Labor Statistics survey of consumer spending patterns. With health care inflation still running at 7.5% annually, that difference carries a big impact. Over the past three months, the inflation rate for someone over 65 was 3.7%, compared to 3.2% for the U.S. overall. A person over 75 years old is seeing an inflation rate of almost 4% annually, which makes the real interest rate on savings accounts close to zero.

The elderly are not the only ones facing higher-than-average inflation rates. Also hit hard are low-income and self-employed households, who pay a disproportionately high share of their incomes for health care. Who has the lowest inflation rate? High-income earners, who are more likely to be employed at jobs with good health care plans.MICHAEL J. MANDEL


We Almost Lost the Nasdaq
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus