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The first official U.S. federal poverty line was developed in the 1960s; since the mid-1990s the scientific consensus has been that it has become outdated and inaccurate. This article explains the key elements of the current federal measure that are inaccurate for older adults in general and older Latinos specifically. An alternative is described that addresses the key failings of the current measure. The alternative, the Elder Economic Security Standard™ Index (Elder Index), adapts a national methodology to the basic costs of living in California for 2007 using data from the American Community Survey, and other public data sources. The results show that the amount needed for basic economic security in California is higher than the federal poverty level in all counties, and averages about twice the federal level. Housing costs are the largest component of costs in most counties, although health care is the largest component for couples in lower housing cost counties. Among singles and couples age 65 and over in California, almost 60% of Latinos have incomes below the Elder Index compared to one-quarter of non-Latino whites. The rates are higher among renters, and older Latinos are more likely than non-Latino whites to rent. Applying the Elder Index in California documents the disproportionate rates of economic insecurity among older Latinos. The findings indicate that changes to public programs such as Social Security and Medicare that decrease benefits or increase costs will have disproportionately negative impact on the ability of most older Latinos to pay for basic needs.

New calculations using the Elder Economic Security Standard (TM) Index (Elder Index) for California show that both singles and couples age 65 or older who rent need more than twice the amount established by the Federal Poverty Level (FPL) Guideline to meet basic living expenses. The gap is greater for elders who own their home and are paying a mortgage than for renters. The gap between basic expenses and the FPL is smaller for owners without a mortgage, but still exists. Housing and health care are the primary drivers of the high costs. This policy brief documents that the Elder Index provides a better measure of income adequacy than the FPL for older adults because it accounts for those costs at the county level. The growing number of public and nonprofit organizations using the Elder Index will aid the quality of planning and programs that improve income security for California's rapidly growing older population.