Medicare pays for the bulk of the medical care for Americans over 65, but a lot of their income is still eaten up by medical expenses.
The list of expenses is long. The lion’s share goes toward various insurance premiums – for Medicare Part B coverage, Part D prescription drug coverage, and supplemental insurance, whether Medigap, a Medicare Advantage plan, or employer health insurance for retirees. The remaining costs, for copayments and deductibles, are also significant.
These out-of-pocket costs, when added together, averaged about $4,300 annually per person, finds a new study by researchers Melissa McInerney, Matthew Rutledge, and Sara Ellen King of the Center for Retirement Research.
Out-of-pocket costs consume a third of the amount that retirees receive from Social Security, which is the most significant source of retirement income for a wide swath of the nation’s seniors, including many people in the middle-class. Half of seniors get at least half of all their income from the federal program.
The Medicare Part D prescription drug program has given some relief to retirees. After it became effective in 2006, the share of seniors’ income consumed by out-of-pocket costs declined slightly and then declined again after a follow-up reform of Part D began to close a big gap in drug coverage – known as the donut hole – in 2010. …Learn More
When young people are dissatisfied with a job or feel it intrudes too much on their personal lives, they find a new one. Not so easy for older workers.
Their decision is complicated partly because they have fewer employment options as they age, but also because they must ask themselves whether or not it’s time to retire.
A study out of the University of Michigan’s Retirement Research Center found that people in their 50s, 60s, and 70s often choose to retire when long hours, inflexible schedules, and work responsibilities don’t allow them to do what’s required to help a family member or a sick spouse or to enjoy more leisure time.
Many things are constantly pushing and pulling older workers toward retirement, from lower pay, job stress, or unrealistic job demands to accumulating their required pension credits or having enough money in the bank. But the focus here is on lifestyle.
Marco Angrisani and Erik Meijer at the University of Southern California and Maria Casanova at California State University used a survey of some 6,000 older workers that asks about work-life conflicts and then followed them for nearly a decade to see if such conflicts led to decisions to reduce their hours of work or retire altogether.
The main takeaway was that both older men and older women who’ve had a work-life conflict in the past two years are far more likely to retire. This may not be surprising for women, who are typically the default caregivers for an ailing spouse, parent, or even a grandchild. …Learn More
This cartoon, by Vancouver Sun cartoonist Graham Harrop, hits on one of retirees’ biggest mysteries: their future health.
The elderly live with the anxiety of getting a grave illness that isn’t easy to fix, such as cancer or a stroke. And despite having Medicare insurance, they also have to worry how much it would cost them and whether they would run through all of their savings.
They’re right to worry. Health care costs increase as people age from their 50s into their 60s and 70s. About one in five baby boomers between 55 and 64 pays extraordinary out-of-pocket medical expenses in any given year. But by 75, the odds increase to one in four, according to a report summarizing the reasons that some seniors’ finances become fragile.
Large, unexpected medical expenses are one of two major financial shocks that threaten their security – widowhood is the other. A small and unlucky share of retirees will find it difficult to absorb a spike in their medical costs, forcing them to cut back on food or medications, the report said.
Harrop’s cartoon is the product of his cousin’s inspired suggestion that he fill a book with cartoons about the humorous accommodations made between couples who’ve lived together for decades. The book – “Living Together after Retirement: or, There’s a Spouse in the House” – reveals his personal knowledge of the subject. Harrop, who is 73, has lived with his partner, Annie, for more than 20 years.Learn More
People who have a college education are known to live longer. But could a sunny disposition also help?
Yes, say two researchers, who found that the most optimistic people – levels 4 and 5 on a 5-point optimism scale – live longer than the pessimists.
But this effect works both ways. The biggest declines in optimism have occurred among older generations of Americans who didn’t complete high school at a time when this was far more common. It’s no coincidence, their study concluded, that the white Americans in this less-educated group in particular are also “driving premature mortality trends today.”
The finding adds new perspective to a 2015 study that rocked the economics profession. Two Princeton professors found that, despite improving life expectancy for the nation as a whole, death rates increased for a roughly similar group: white, middle-aged Americans – ages 45-54 – with no more than a high school degree. They suggest that addiction and suicide play some role, both of which have something to do with the deterioration in the manufacturing industry that once provided a good living, especially for white men.
To make the link between mortality and optimism, Kelsey O’Connor at STATEC Research in Luxembourg and Carol Graham at the Brookings Institution examined whether heads of households surveyed back in 1968 through 1975 were still alive four to five decades later. They controlled for demographic characteristics and socioeconomic factors, such as education, which also affect longevity. …Learn More
Education is the fastest ticket to a higher income, more opportunities, and a better quality of life. But four-year college is often a tough road for the pioneering first in their families to attend.
They have at least two big disadvantages – apart from the well-known financial one. Unlike the teenagers of the highly educated professionals who usually take for granted that their children will go to college, first-generation students might not have the benefit of high expectations at home. College is outside their comfort zone, which creates psychological barriers to attending and succeeding.
A second disadvantage is that they aren’t always going to learn, through a sort of parental osmosis, to cope with higher education’s mores and attitudes or be as resilient to its challenges.
UCLA student Violet Salazar says in this video that she used to feel she didn’t fully belong, “because I am first generation or because I am Latina, and also coming from a low socioeconomic background.” She went on to organize an entire dormitory floor specifically for first-generation students to make them feel more at home. …Learn More