The National Academy of Science has a formula to more accurately gauge the poverty levels in the U.S. For one thing, it takes into account the inflating prices of health care. It also adjusts for those who receive federal aid in the form of food stamps or other programs. What's sad is that when the formula is applied to citizens over the age of 65 the poverty rate hits 18.6% (6.8 million people); compared to 9.7% (3.6 million people) when calculated with the current system used by the government. The NAS formula is gaining credibility, and it should when you consider the following. This article from the AP says, "The current calculation sets the poverty level at three times the annual cost of groceries. For a family of four that is $21,203. That calculation does not factor in rising medical, transportation, child care and housing expenses or geographical variations in living costs. Nor does the current formula consider noncash aid when calculating income, despite the recent expansion of food stamps and tax credits in the federal economic stimulus and other government programs."
This new data should be a strong reminder how important it is--especially for young couples--to plan and prepare for retirement. If there has been a silver lining to the Great Recession, it's been the increased saving rate in the country. Prior to the economic collapse, the saving rate in the country actually went negative--the first time that had happened since the Great Depression. Maybe this collapse is the same kind of nerve rattling that spurred an entire generation to save starting in the 1930s. Time will tel. Read the full article here.