The Forgotten Middle: Worsening Health And Economic Trends Extend To Americans With Modest Resources Nearing Retirement

Abstract

In an aging US society, anticipating the challenges that future seniors will face is essential. This study analyzed the health and economic well-being of five cohorts of Americans in their mid-fifties between 1994 and 2018 using the Future Elderly Model, a dynamic microsimulation based on the Health and Retirement Study. We projected mortality, quality-adjusted life years, health expenditures, and income and benefits. We classified individuals by economic status and focused on the lower middle and upper middle of the economic distribution. Outcome disparities between people in these two groups widened substantially between the 1994 and 2018 cohorts. Quality-adjusted life expectancy increased (5 percent) for the upper-middle economic status group but stagnated for their lower-middle peers. We found that the combined value of the current stock (financial and housing wealth) and the present value of the expected flow of resources (income, health expenditures, and quality-adjusted life-years) after age sixty grew 13 percent for the upper-middle group between cohorts, whereas people in the lower-middle group in 2018 were left scarcely better off (3 percent growth) than their peers two decades earlier. The relatively neglected "forgotten middle" group of near-retirees in the lower-middle group may require stronger supports than are currently available to them.

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