LeadingAge Magazine · May-June 2018 • Volume 08 • Number 03

Financial Counseling for Older Adults With Low Incomes

May 16, 2018 | by John Mitchell

It’s never too late to learn. Older adults can benefit from financial counseling in their later years and see improved health and quality of life as a result.

For any LeadingAge member serving elders, the challenge is obvious in a trifecta of data points:

  • Some 32% of adults 53-62 have no retirement savings.
  • Some 30% of seniors experience a zero or negative budget every month after paying for basic needs.
  • A third of adults 50 and older pay an excessive share (more than 30%) of their income for housing.

These sobering facts need to be faced by providers, especially those offering affordable senior housing, according to Roslyn Quarto, executive director of ESOP, a housing and financial counseling agency that was once the largest foreclosure prevention agency in Ohio. ESOP is now a subsidiary of the Benjamin Rose Institute on Aging, a LeadingAge member in Cleveland, OH, where Quarto is also vice president of advocacy.

The financial stress seniors face in meeting basic housing needs cascades into a quagmire of other problems, ranging from poor health to increased risk of suicide, and stresses a community’s social fabric. And part of the problem often is that low-income seniors don’t have basic financial skills. Quarto and ESOP are working to change that.

“If you saw your parents going to [a quick loan] lender to buy Christmas gifts at 500% interest for 30 days, that’s what you’re going to do,” she says, stressing the need to teach people basic financial skills. “Wealthy people have financial planners and the middle class has accountants. What do low-income people have? Historically it’s trying to get entitlements and benefits.”

Financial Counseling photo


Older adults who are in their later earning years, or retired, are not able to effect big change. So, ESOP works on incremental steps to improve their financial situation. Quarto says, given the huge numbers of retiring baby boomers, such financial skill learning is going to be in greater demand.

“People are not prepared. We’re going to see middle income people—who have never had issues with money—hitting retirement … and living below the poverty level for the first time in their lives,” says Quarto. “We have a country right now where the bottom quartile is relying almost exclusively on Social Security.”

ESOP has trained financial coaches who go out in the community—often at one of Benjamin Rose’s 7 senior centers—to work with low-income clients. Such assistance is wide-ranging. In some cases, if the older adult has poor vision and cannot read their financial documents, ESOP will provide them a voucher to get new glasses. In most cases, however, the coaches work with the clients to help them understand basic financial concepts.

“One of the big problems we see among older adults is that they are paying $150 [a month] for cable, internet and phone. Why are you paying for 283 channels when all you watch is Judge Judy?” asks Quarto.

The goal, for example, is to help a 92-year old living on $1,000 a month to save $300-400 a month through better financial habits. Add in free glasses, a free air conditioner and a free rehabilitation of inefficient, leaky windows to lower energy costs, and the client has realized savings that can be used to better meet housing expenses.

ESOP has several different strategies. For example, it teams with a local health system to work with patients before hospital discharges to coach them on a financial plan related to lifestyle and housing. This helps patients improve their health and helps keep them from being readmitted. ESOP also offers a “Pretirement” program for adults aged 50 to 64. This includes a matched-savings program to create good money habits. If a client works with them at “a deep level,” ESOP will match savings deposits up to $500 over a year.

“We know that 67 million Americans can’t cover a $500 emergency. You can graduate from our program with a minimum of a $1,000 in the bank,” Quarto explained. “We’re teaching people, sometimes for the first time, the difference between a need and a want. If you’ve never been taught these things, it’s not too late—especially if you’re still working.”

ESOP has received $200,000 in funding from the Office of Nonprofit Engagement at JPMorgan Chase (JPMC), through its Financial Solutions Lab grant program. The grant allows Quarto and her staff to travel around the country, training other nonprofit agencies to build integrated financial skills programs. To date, she says they have shared their strategies with dozens of housing and service agencies affiliated with JPMC.

“Sound financial health is not only important for individuals and families to thrive but essential for inclusive communities and resilient economies,” says Courtney Howard Hodapp, executive director of the Office of Nonprofit Engagement at JPMC, in explaining their support for the ESOP training initiative.

Bank of America (BOA) also recognized ESOP’s work with a $200,000 grant in 2017, through its Neighborhood Builders® program, to share its methods with peer nonprofits. BOA also offers an online “Better Money Habits” self-education program to help older adults improve their financial knowledge, according to Jeneen Marziani, BOA Ohio market president.

“We have Better Money champions who have worked with [Quarto] and her team, talking to elders about things that are important to them … that’s a tool that can empower seniors to work with our champions or online,” says Marziani.

Nationwide, The AARP Foundation (AARPF) works to end senior poverty through several programs, including its Finances 50+ program. The program is taught at over 100 locations across the U.S. and has 7,000 graduates. AARPF also offers real-time financial coaching to build savings and even save for medical treatment so seniors don’t delay getting the care they need. But there are also other reasons to improve financial acumen, according to Paolo Narciso, director, income security at AARPF.

“An awareness of financial habits is also shown to have intergenerational impact. By modeling good financial behavior, older adults become examples to younger generations and affect long-term financial mobility,” he said.

As far as housing goes, Narciso believes financial resiliency is helpful in many ways. He said that low-income older adults can have assets up to $5,000 generating income and still meet median income requirements to qualify for federal Section 8 vouchers.

“Landlords like tenants who can withstand short-term income volatility,” he said. “Having a savings account helps.”

A number of LeadingAge members support Stewards of Affordable Housing for the Future (SAHF), which to date has helped provide 130,000 rental units across the country. SAHF released a 2014 report titled “Housing as a Platform for Improving Financial Capability,” prepared by the Center for Financial Services Innovation (CFSI). The SAHF report advocates for “teachable moments” for learning behavioral change advocated by ESOP, AARPF, BOA and JPMC. The report goes on to note that: “Stable housing has a deep and lasting impact on an individual’s and community’s well-being.” But sentiment is not enough, according to John Thompson, chief program officer at CFSI.

“You need to know information and it needs to be timely … it needs to be actionable. But, simply knowing isn’t going to be enough,” says Thompson. “You’ve also got to have access to good products and services, and support. That allows you to improve your overall financial health.”

A big truth about financial intelligence, states Quarto, is that everyone can benefit from better skills at all ages—including herself. As a corporate attorney for a large company, she decided to withdraw $15,000 in a retirement fund when she left the position. Quarto used the money to pay off credit cards and student loans, and to buy a new bed.

“That bed is long gone,” she says with a laugh. “If I had left that money in the account, today it would be worth $88,000. That was not the best decision…the financial lesson is that life doesn’t start and end in any given moment.”

Financial Education Resources

AARP Foundation, Finances 50+ program: This nonprofit program is designed to motivate and empower participants to take charge of their financial future. It provides a free, downloadable participant guide and volunteer guide that can be used by any organization to help seniors better manage their money.

ESOP: Originally named East Side Organizing Project, this nonprofit changed its name to ESOP in 2007 to better reflect its expanded state and national mission of educating seniors on good financial habits, with an emphasis on housing issues such as preventing foreclosure. ESOP is now a subsidiary of Benjamin Rose Institute on Aging.

National Council on Aging's Savvy Savings Seniors® Financial Education Tools: This nonprofit program focuses on disadvantaged older adults, helping them learn basic money skills, budgeting, how to avoid scams and how to apply for benefits.

National Council Reinvestment Coalition’s Housing Counseling Network: This nonprofit focuses specifically on financial issues related to housing, including homebuyer education and money/debt management.

Consumer Financial Protection Bureau: This federal agency offers several consumer tools on its website, including planning for retirement.

Bank of America’s Better Money Habits®: BOA partners with the Kahn Academy to distribute practical knowledge about managing money.

John Mitchell is a writer who lives in Cedaredge, CO.