Insights from Chicago’s Older Adults in Poverty on Barriers to Financial Stability and Possible Remedies

Published: 2025
Project ID: UM25-10

Abstract

Social Security programs have been instrumental in reducing poverty rates among the population ages 65 and older (28.5% in 1966 compared to 10.3% in 2021) (Li and Dalaker 2022). But challenges persist, especially among older adults of color who experience poverty at about twice the rate compared to their white counterparts. Similarly, current estimates show that Black and Latinx households have median wealth that is only a fraction of that of white families (Aladangady and Forde 2021). Households in or near poverty often experience long-term recurrent exposure to shocks that make it difficult to attain financial stability. This is consistent with Net Worth Poverty (NWP), a concept that refers to a situation where a household’s net worth is so low that it is economically vulnerable. NWP was first defined as a household’s net worth being less than a quarter of the federal poverty line (Haveman and Wolff 2004). In 2023, this threshold was quantified as $7,500 (Gibson-Davis et al. 2023). There are undoubtedly multiple factors that interact in complex ways over the course of the life cycle that result in some subpopulations reaching retirement in or near poverty. To design effective policies to reduce the observed inequalities requires a thorough understanding of the underlying mechanisms.

In this project, we propose to partner with members and representatives from affected communities in collaboration with the Chicago Community Trust to gather information on the full range of adversity that older adults in or near poverty have experienced over the course of their lives and to co-construct with them what type of interventions or policies could have helped them or their families to get ahead or buffer the effects of adverse events. Special emphasis will be placed on barriers to attaining financial stability and how they may vary across sociodemographic groups, including by race and ethnicity.

Publications