Budget deficit will squeeze older Alaskans
The world is an economic mess. People with means are doing fine but they are a small portion of the population. We here in Alaska have not been hit as hard as parts of Europe but some of our older residents have changed their expectations.
The March copy of the state Dept. of Labor Economic Trends show that Alaskans in the 55 to 65-plus age bracket are increasingly participating in the overall labor force. The percentage of increased participation is up about 6 percent for 2011 compared to previous years.
It is more likely than not that the increased labor participation by seniors is necessitated by the fact that they have insufficient retirement savings.
Several weeks ago I wrote an article describing how rough seniors have it in Europe. Well, it’s gotten worse.
Barry Hilton (Associated Press) recently reported on Maria Cabral, a 66-year old retired librarian in Portugal who joined a lobbying group to protect pensioners. She told the reporter that she felt compelled to act when she saw elderly people in stores counting out coins in their palms to see if they had enough to buy necessities, and asking at pharmacies if they could pay for their medicine in installments. Cabral herself has lost 20 percent of her pension in recent years and faces more cuts ahead. She said she will likely have to give up small luxuries like buying books or going to a movie or concert.
Alaska seniors are not going to end up like European retirees, but change is inevitable because the U.S. of A is mired in debt, which is hindering the country’s economic growth.
In an effort to reduce debt I expect the government to increase the Social Security age of retirement to 68 and reduce yearly Social Security increases, even though inflation will sap the value out of the dollar. I expect Medicare premiums to be increased on a needs-based formula – premiums will be tied to a senior’s overall wealth.
So what can an Alaskan do? An Alaskan can work longer, save more, pay off debt and spend less.
Leonard Kelley is the Older Persons Action Group board president.