Adults in their 50s and older are financially better off than Gen Z and millennials on average, but a significant portion still faces challenges managing their finances. For some, those challenges might include supporting young adult children while also providing care or support to their aging parents. For others, it includes unexpected healthcare costs and inflated expenses that diminish a fixed income in retirement. Many people are choosing to work later and later into life as the cost of living rises. Unique challenges vary across the Silent Generation, Baby Boomers, and older members of Gen X.
Assurance IQ’s Financial Well-Being 2024 report found that American households are struggling to juggle bills with healthcare expenses and rising costs. In this deep dive, we look at responses from people who are aged 50 and older. Among our sample of 5,000 adults, 2,034 were at least 50 years old.
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More than a quarter skipped medical care due to cost last year
While those aged 50 and older tend to feel better covered by health insurance than younger generations, a sizeable portion (22%) still feels that their coverage is not sufficient. Additionally, nearly two in five (38%) feel that they are probably overpaying for their health insurance, but it’s too difficult to understand what they need. It’s clear that a good chunk of older Americans is not satisfied with the health coverage options available to them.
Older adults tend to have a better grasp on understanding their health insurance than younger generations and are better positioned to cover healthcare costs – but gaps still exist.
- Only two thirds (65%) are mostly or completely certain they know what their health insurance deductible is, and a similar percentage (64%) could cover most or the entire thing with their current savings – leaving more than one third (35%) at risk of unexpected or unaffordable medical expenses.
- Comparatively, only 37% of Gen Z feel similarly confident in knowing their deductible, and less than half (46%) could cover it with their savings.
However, people in their 50s and beyond are more likely to face health issues than the younger generation, making preparedness on this front much more critical. it’s concerning that roughly one third do not know their deductible and could not cover it if need be.
When looking at those living in households earning below the median income (roughly $75,000 in the U.S.) the problem is magnified. Only 53% could cover most or all their deductible with current savings. Nearly one in five (19%) say they could cover none of it.
Unfortunately, it’s highly likely that most people will face unexpected medical expenses.
- More than two in five (44%) of people 50 and older report that they had to pay an unexpected medical expense just last year.
- While they were less likely than younger generations to go into debt or miss other bill payments to cover the expense, 18% used a credit card and 17% had to cut back on-day-to-day spending to do so.
- More than a quarter (26%) say they skipped healthcare last year due to the cost.
- While the risk of an unexpected medical expense appears to decrease with age, 27% of the Silent Generation, 40% of Baby Boomers and 63% of Gen X still paid one last year.
If faced with a future unexpected medical cost, nearly one in five (18%) people 50 or older would not be able to cover it and 16% would only be able to pay less than $250 without impacting their ability to pay monthly bills. For those earning below median household income, more than a quarter (28%) would not be able to cover it and 24% could only pay up to $250. That’s more than half of adults in this age and income group who would have less than $250 on hand, if they had anything at all, to cover healthcare surprises. It’s no surprise that nearly one third (31%) of this group skipped care due to the cost last year.
Choosing the right health insurance plan can make a meaningful difference in someone’s ability to cover out-of-pocket medical expenses. However, for many consumers, the choice is overwhelming. For example, the average Medicare beneficiary had dozens of options to choose from for the 2024 plan year. With the right personalized guidance from a licensed agent, people can optimize their coverage to control future costs, such as by incorporating dental, vision and hearing coverage, receiving a flexible spending account that covers over-the-counter items, or by choosing a plan that covers their local pharmacy and hospital in-network.
Many have no plans for the end of their life, which could disrupt their families’ financial stability
Older generations predictably have Gen Z and millennials beat when it comes to preparing for the end of their lives. However, a surprising portion say they have not made moves to financially prepare for death.
- Nearly half (46%) have not communicated their final wishes, such as funeral plans or whether they want a burial or cremation.
- A similar portion (44%) have not created a will.
- More than two thirds (69%) have not set aside any savings for their final expenses.
- More than half (57%) have not purchased life insurance.
Overall, this group is less concerned that their family would not be able to maintain their standard of living if they were to die (42%) than the average respondent (56%). However, more than one third (35%) believe their funeral would cost less than $5,000. According to the National Funeral Directors Association, the average cost of a funeral in 2023 was $8,300. That’s not including a burial vault, cemetery fees, or items like an obituary, flowers, or fees for a priest or minister. Additionally, more than one in three (35%) people this age group said they have a spouse, partner or family member who is at least partially dependent on their income.
Life insurance can help people of all ages build financial stability for their families. Life insurance can help cover final expenses, replace income, and even pay off debts. For someone in their 50s or 60s who is still working, still has a mortgage, and may still have dependents, term life insurance can provide coverage that would replace their income or cover outstanding debts if they were to pass away before retirement age, enabling their family to maintain their standard of living.
Term life insurance is the most popular type of insurance among Gen X respondents (50% with life insurance say they have this type), most of whom are probably still working. More Gen Xers (65%) report feeling concern that their family would not be able to maintain their standard of living if they were to die than Baby Boomers (38%) and the Silent Generation (25%). Additionally, Gen X is more likely to support a spouse, partner or family member financially (43%) than older generations (33% of Baby Boomers and 31% of the Silent Generation say this).
People who have retired and no longer have debts or dependents, on the other hand, might prefer permanent life insurance, such as final expense insurance that helps their family cover the cost of a funeral and burial. This can be helpful even for people with savings set aside. In many cases, life insurance will be paid out faster than assets will be distributed through probate. Permanent life insurance was more popular among insured Baby Boomers (57% say they have it) and the Silent Generation (65% say they have it).
We saw in our research that as people age, they report having a smaller life insurance death benefit, likely because they are no longer supporting dependents. More than half (51%) of insured people in the Silent Generation have less than $50,000 in life insurance, compared to two thirds (66%) of insured Gen Xers who have more than $100,000 in coverage. A licensed life insurance agent can provide guidance on which type and coverage amount is right, based on someone’s unique needs.
Some older adults struggle to pay their bills, but social well-being is high
While older adults are overall more established financially than younger generations, many still struggle to manage day-to-day expenses and a rising cost of living.
More than one quarter (26%) of people who are 50 and older believe their finances will become less predictable in the next three years. Lower income respondents were more likely to believe their finances would become less predictable, with 28% of those 50 or older and earning less than $75,000 saying this compared to 21% of those earning more.
Additionally, nearly half of those aged 50 and older (46%) say they struggled to pay their bills last year, turning to tactics such as:
- Using a credit card or borrowing money (28%)
- Paying a bill late (27%)
- Skipping meals (12%)
- Selling possessions (13%)
- Overdrawing a bank account (13%)
- Negotiating payment terms (15%)
- Cancelling or decreasing insurance coverage (5%)
People who earned less than $75,000 in household income were more likely to have to use these measures to pay their bills, with 57% of those aged 50 or older in this income group doing so. The Silent Generation appears to be the best positioned to manage their monthly bills, with only 20% reporting that they had do one of these things to pay their bills last year. However, more than two in five (42%) of Baby Boomers say they had to do so and a whopping 70% of Gen X say they did, too.
Despite financial challenges, people 50 and older experience less stress and stronger social connections than younger with family and friends, with 84% rating their connections good to excellent, compared to only 55% of Gen Z and generations, implying that generally, life improves over time. Only 16% report being very to extremely stressed daily, and in the Silent Generation, only 3% say this (compared to 46% of Gen Z and 42% of Millennials). Additionally, the stereotype of lonely older adults does not seem to ring true. Seven in 10 (71%) older adults say their social connections are good to excellent. On this front, the Silent Generation feels the most connected, with 84% rating their connections as good to excellent, compared to just 55% of Gen Z and 60% of Millennials who say the same.
Read the original report: Dive into the well-being challenges facing Americans earning under $75,000. Download Financial Well-Being 2024: The Challenges & Sacrifices Facing American Households.
This survey was commissioned by Assurance IQ and conducted by Wakefield Research among 5,000 nationally representative US adults ages 18+, between December 7th and December 20th, 2023, using an email invitation and an online survey. Data has been weighted.
Results of any sample are subject to sampling variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results. For the interviews conducted in this particular study, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than 1.4 percentage points from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample.