Age Power

Retirement Myth #7: Retired people are a drain on the economy.

I suppose this myth gets perpetuated because of all the reporting on Medicare costs: 618 billion in 2015, 17% of GNP. And while today’s seniors profit from the expenditure, they, alone, certainly didn’t create it.

But what about income and wealth, both of which determine whether one contributes to—or drains—an economy?

According to the UC Davis Center of Poverty Research, retirees (those over 65) make up only 10% of the nation’s poor (this doesn’t mean 10% of seniors are poor; rather 10% of seniors are part of the 15% whom the government calls poor).

The UC Davis study looks at annual income, but what about accumulated assets?

According to 2015 Census Bureau figures , older Americans are far and away the wealthiest segment of society. Sixty-five to 69 year-olds lead with a median net worth just short of 200K. The next richest cohort is 70 to 74-year-olds, and those over 74 still occupy fourth place (behind 60-64-year-olds) with a median net worth north of 155K.

More importantly, they’re not hoarding that wealth. According to a 2013 study reported in Forbes, baby boomers (the new retirees) represent 34% of the nation’s donors and give 43% of all charitable donations (a whopping 61.9 billion a year).

So while Medicare is an unsustainable expense that must be addressed, retired people aren’t draining the economy. Truth is we would be a poorer nation without them