Poll: Older Michiganders are facing financial squeeze, despite state’s recovering economy

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While economists have said the state is seeing a recovery from the economic conditions of the COVID-19 pandemic , more than 50% of Michigan adults 50 and older are reporting financial stress, with pre-retirement adults and individuals with poor or fair health facing a particular strain.

That’s according to recently released data from the Michigan Poll on Healthy Aging, which is based out of the University of Michigan Institute for Healthcare Policy and Innovation. The poll found that 57% of adults 50 and older felt stress about their personal finances in the past year, with 51% reporting inflation had impacted them a great deal over the past year.

“Michigan’s unemployment rate is now just under 4%, the same as the national average,” Helen Levy, a health economist at the University of Michigan, said in a summary of the findings. “But that doesn’t mean that everyone is doing well across the board.”

Of the adults surveyed, 58% reported cutting back on at least one everyday expense, with 43% cutting back on social and recreational expenses, 38% on personal items, 33% on groceries, 27% on home maintenance, 24% on gas and 14% on utilities.

While 67% of individuals with household incomes under $60,000 reported reducing their spending,  47% of those with higher incomes also reported cutting back.

Michiganders in their 50s and early 60s were also more likely to report paring down their expenses with 69% reducing their spending compared to 45% of adults 65 and older who reported cutting back on spending.

Adults in their 50s and early 60s also reported greater stress over their finances, with 31% percent saying they had felt a lot of financial stress, versus 11% of adults 65 and older.

“That surprised us, because obviously we recognize that people 65 and older are more likely to be living on a fixed income, more likely to be living in retirement with more limited means. And for people younger who are more likely to be working to be expressing that level of stress related to their finances is concerning,” said Erica Solway, deputy director of the National Poll on Healthy Aging.

“It may be that they’re looking to the future and thinking that maybe their financial outlook looks different than they had hoped it would be as they age. But it may suggest that there’s more strain in the future for these folks,” Solway said.

However, adults with fair or poor physical or mental health were the most likely to cut back on spending, with 77% of adults with fair or poor physical health saying they had pared down their spending and 82% of adults reporting fair or poor mental health reducing their spending.

These individuals also reported higher rates of financial-related stress.

55% of adults with fair or poor mental health said they had felt a lot of financial stress, whereas 17% of those reporting better mental health also reported  stress over finances.

Looking at physical health, 37% of adults who said their health was fair or poor reported financial stress, compared to 18% of adults with better physical health.

Additionally individuals with fair or poor physical or mental health also reported they had cut back or delayed health-related spending, or did not receive needed care. 26% of Michiganders with fair or poor physical health had avoided or delayed health-related expenses compared to 12% with better physical health. Similarly, 13% of older adults reporting better mental health had cut back or avoided healthcare expenses, compared to 28% with fair or poor mental health.

“It’s kind of well-documented that there’s a bi directional relationship between health and income: that poor mental and physical health can lead to lower income, less ability to work, leaving less finances available,” Solway said. “If people are having financial stress, it can contribute to their health conditions, too.”

“It is very concerning that people in poor mental and physical health are experiencing this, because it’s likely to contribute to continued poor mental and physical health,” Solway said.

Alongside avoiding doctor’s visits, filling prescriptions or having their teeth or eyes checked, cutting back on social and recreational activities can also have impacts on health, Solway said.

“You might think that that doesn’t have a huge impact, but it could impact people’s ability to develop meaningful social connections, which we know is really important for health,” Solway said.

“Some of these may have a more indirect impact on health, but are still notable and concerning. And thinking about what options might be available to help people to maintain those things, even if it means having to make cuts. Is there education or opportunities to support people in navigating this decision making so that it has a more limited impact on their overall well-being,” Solway said.

Individuals with household incomes under $60,000 a year also reported avoiding or delaying health costs at a higher rate than those with greater annual household incomes, at 19% compared to 10% of those with household income over $60,000.

While 18% of adults 50 to 64 reported trouble paying for health insurance, prescription drugs or health care services, 11% of adults 65 and older reported those same difficulties. Solway noted that access to Medicare — which provides health insurance to adults 65 and older — is a big factor in why adults 50 to 64 are experiencing more of a strain on their health-related finances.

Overall, the poll’s results suggest that financial stress among older adults is a fairly common problem, with more than half of adults 50 and older voicing concerns.

“I think it’s helpful for us to be aware that this is so common. I think it’s helpful for people who are experiencing these, you know, financial strain, to recognize they’re not alone,” Solway said.

“Even when economic reports suggest that overall, we’re doing well, that this isn’t just an individual challenge that people are having, but this is something that we should be considering on a program policy level about how we can address these experiences,” Solway said.

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