African descent, senior adult woman at home sitting at kitchen table paying bills or online banking using laptop computer. She is frustrated at the overdue charges. Paperwork and coffee cup on table.
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Middle-income Americans nearing retirement face worsening health and economic well-being, according to a new Health Affairs study.

Researchers analyzed financial and housing wealth, income, health expenditures and life expectancy of five groups of middle-market Americans in their mid-50s between 1994 and 2018. The data showed that the socioeconomic disparities between the lower-middle income and upper-middle income groups widened substantially.

Financial and housing wealth, and expected income, health expenses and quality-adjusted life years after age 60 grew 13% for upper-middle Americans. Lower-middle income individuals, however, saw only 3% growth in those resources compared to their peers two decades earlier. 

The findings were significant, according to the authors, because the so-called “forgotten middle” group has too many resources to qualify for government aid such as Medicaid but may struggle to afford housing and healthcare in their retirement years.

The results mirror a 2019 study by researchers at NORC at the University of Chicago that was funded by the National Investment Center for Seniors Housing & Care. 

In a 2022 update to the 2019 “Forgotten Middle” study, researchers determined that by 2033, 11.5 million older adults (72%) won’t qualify for public assistance and likely will be unable to pay for their long-term care needs on their own.

“Overall, this study projected that the expected health and economic well-being of Americans nearing retirement age in the lower half of the economic distribution is no better than that of their counterparts more than two decades ago,” the Health Affairs paper concluded, adding that those lower-middle income individuals are being left behind compared with those in a higher income bracket. “Contrary to popular discourse, we found the growing split in the middle of the economic distribution to be important, in addition to the difference between those at the top and the bottom.”

As a result, they said, this lower-middle income group’s expected future quantity and quality is no better than earlier groups of older adults. Researchers projected that a significant group of middle-income older adults will enter retirement with worse health and fewer resources than members of previous generations, and this situation will create additional economic burdens for family members and society because those individuals will require more support to effectively manage chronic conditions.

Anticipating potential challenges facing future middle-income older adults, researchers said, is crucial to developing safety nets, public policy solutions and support systems for this growing population.