Senior Finances

By on Feb 1, 2019 in News

The recently released Argentum 2019 Forecast Report takes a quick peek at past senior economic activity as well as current trends and future projections.helping seniors with finances

A Glance Back, Ending 2018

At the end of 2018, the economy added more than 19.4 million net new jobs over the span of 94 consecutive months of expansion. The national unemployment rate dropped below 4 percent, which is the lowest unemployment rate since 2000. The 15 percent improvement in the employment base created a positive foundation for 2019.

Looking Forward to 2019

Economic forecasts for 2019 are positive. Argentum projects a robust labor market with ample opportunities for workforce entrants as well as advancement amongst seasoned laborers.

The nation’s real gross domestic product (GDP) is estimated to increase by 2.8 percent in 2019. Following a 2.9 percent gain in 2018, the projection would represent two historic back-to-back years of growth. It is likely that the Federal Reserve will assume a neutral monetary policy, neither accommodative or restrictive.

Trade woes may lead to higher prices for U.S. consumers, particularly on goods imported from China.

Senior Households

Thanks to recent tax cuts, most households can expect an improved financial outlook. Disposable personal income may increase by 2.6 percent, similar to income increases in 2017 and 2018. For households headed by seniors ages 65 to 74, median income bumped up 1.4 percent to about $50,804 in 2017, the most recent figures reported.

While income growth has slowed, expenditures steadily rise. Average household expenditures exceeded $60,000 in 2017, an increase of 4.8 percent from 2016. On trend, seniors are still big spenders. Between 2012 and 2017, expenses in older households increased by 25 percent. In 2017 alone, households headed by seniors ages 65-74 experienced an 8.1 percent increase in expenditures.

Seniors were not buying the latest shoes and designer handbags. In 2017, 74 percent of expenditures for households headed by seniors ages 65-74 were senior housing, healthcare, food and transportation.

Healthcare demonstrated one of the larger expenses increases in recent years. From 2012 and 2017, average healthcare expenditures increased 28 percent for households headed by seniors ages 65 to 74.

Senior Wealth

The latest federal data for senior wealth is derived from 2016.

Older seniors are investing more into their retirement than ever before. Almost 41 percent of households managed by seniors ages 75 and up had retirement accounts in 2016. That’s an 11 percent improvement from 2007. Nearly half of seniors ages 65-74 had retirement accounts in 2016, which is not a significant change from 2007.

Nonfinancial assets are also among mature seniors’ wealth. About 83 percent of households led by adults ages 75 and up listed their primary residence as an asset, as opposed to only 77 percent in 2007.

In 2016, the median net worth of households headed by seniors ages 75 and older was $264,800. This recent profile of advanced seniors is the wealthiest on recorded by net worth. Younger seniors, ages 65 to 74 years old, did not fare as well. Their median net worth was $224,000 in 2016, a drop from $277,000 in 2007.

Senior Debt

Debt ratios are at a historic high amongst America’s seniors. Almost one-half of households managed by adults age 75 and older revolved debt in 2016. A larger portion of younger seniors carried debt. About 70 percent of households headed by seniors ages 65 to 74 years old revolved debt in 2016.

Read the full Argentum 2019 Forecast Report.