Question

When the Supplemental Poverty Measure, an experimental income-based method that takes into account more factors than does the official poverty level calculation, is used, is the poverty rate for older adults higher?

Answer 1

Yes, when using the Supplemental Poverty Measure, which accounts for a broader range of economic factors, the poverty rate for older adults can appear higher than when using the official poverty measure. This is due to the SPM taking into account additional living costs and resources not included in the traditional calculation.

Step-by-step explanation:

When considering the Supplemental Poverty Measure (SPM), which is a more comprehensive assessment of income that includes additional factors such as taxes, non-cash benefits, and necessary expenses not accounted for in the official poverty measure, the poverty rate for older adults can be higher compared to traditional calculations. Historical data shows that since the mid-20th century, the poverty rate for seniors had been experiencing a downward trend, declining significantly from about 30% in 1967 to 9.7% in 2008. However, after the 2008 recession, the impact on retirement savings and public support systems caused the rate to rise to 14% by 2010. Furthermore, seniors tend to receive the majority of their income from Social Security, which is generally unaffected by economic downturns, providing them with some level of financial stability despite market fluctuations.