Posts Tagged "aging"

Medicare: the Future is Now

When health care is factored in, more than half of Americans haven’t saved enough money for retirement.

But that price tag could become more unattainable under President Obama’s proposal last week to cut $248 billion from Medicare by raising premiums, copayments, and other health costs. With Republicans also talking reform, the impact of Beltway belt-tightening is coming into sharper focus for more than 45 million Americans covered by the federal program.

It’s a good time to revisit 2010 research by Anthony Webb, an economist with the Center for Retirement Research at Boston College, which hosts this blog. Webb calculated how much a “typical” retired couple, both age 65, needs today to cover out-of-pocket expenses over their remaining lives. The numbers are shocking:

  • A couple needs $197,000 for future Medicare and other premiums, drugs, copayments, and home health costs;
  • There is a 5-percent risk they need more than $311,000;
  • Including nursing-home costs, the amount needed increases to $260,000;
  • There is a 5-percent risk that will exceed $517,000.

To arrive at the estimates, Webb simulated lifetime healthcare histories by drawing on a national survey of older Americans. The difficulty for individual retirees who might want to use these estimates, however, is that their actual spending will vary widely depending on how long they live and their health outcomes. That’s where the risk comes in.

In this video, Alicia Munnell, director of the Center, interviews Webb about his research. To read a research brief, click here.

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Widows Have Social Security Options

Julie Taylor-Cooper, who worked for decades as an accounting manager, now scrapes by on her late husband’s Social Security checks and a $145-a-week job.

Many baby boomers like Taylor-Cooper may not realize there are various strategies for claiming full Social Security benefits that can have a dramatic impact on their retirement security.

“There are eight or nine options for retirees, spouses, and widows,” said Stephen Richardson, spokesman for the Social Security Administration. (Full disclosure: SSA funds this blog.)

Julie Taylor-Cooper from Over Fifty and Out of Work on Vimeo.

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Wives Learn Finances as Husbands Age

A 29-year-old Ph.D. candidate is challenging the belief that elderly women don’t prepare to take over the household finances after their husbands die and leave the task to them.

The stereotype about older women probably springs from pervasive evidence that women generally have lower levels of financial literacy than men.

But Joanne Hsu at the University of Michigan found that women prepare for the high likelihood that their husbands will die first by beginning to acquire financial knowledge.  Some 80 percent of the women in her sample are on track to catch up with their husband’s level of financial knowledge.  Her study controlled for low cognition, so her findings measure the wife’s improvements that are above and beyond her husband’s. …Learn More

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Forced into Retirement? Downsize

Laid off from his job as a software engineer, Ken Wadland did something smart: he downsized.

After losing his job in June 2009, it immediately became obvious to Wadland that he could not afford his large house in the Rhode Island countryside. He sold it and purchased a condominium to reduce his housing costs, which are the largest single expense for most households.

The financial-services industry barrages baby boomers with tips for saving and investing their retirement nest eggs. But little attention is paid to the strategy of downsizing, an effective way for baby boomers to improve their retirement security by cashing in on the large amounts of equity built up in their homes over decades.

“I’d rather not have the expense,” Wadland, who is 60, said in this video.

Ken Wadland from Over Fifty and Out of Work on Vimeo.

Wadland explained how he came around to his decision in the online video series, “Over 50 and Out of Work,” which is featured occasionally in Squared Away.

His most recent job was at a large company, which once awarded him for being an innovator. “My passion is solving puzzles,” said Wadland. …
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Older Workers Behind the 8 Ball

Rudy Limas, a laid-off truck driver, resorted to applying for unskilled labor jobs – anything to get back to work and support his family.

“They look at your age and think, ‘He can’t handle it’ – even though I can,” the 61-year-old Oregon resident said. “They look at your age [and] they’re not going to hire you.””

Limas’ video interview, included in the online project, “Over 50 and Out of Work,” was selected by Squared Away for a series about the particular financial issues facing people approaching retirement age who lose their jobs.

Rudy Limas from Over Fifty and Out of Work on Vimeo.

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Toll High When Layoffs Hit After 50

The financial impact on older people who find themselves out of work goes far beyond the missed paychecks: it upsets well-laid plans for retirement.

Stan Bednarczyk, an engineer who was laid off in 2009 by a Michigan automobile supplier, has numerous concerns.  He can no longer contribute to the retirement account sponsored by his former employer.  And since Social Security is based on an individual’s 35 highest years of earnings, his future benefit may be lower when he retires.

The total dollar cost of his late-career joblessness, which he detailed in this video, is shocking.

 

Stan Bednarczyk from Over Fifty and Out of Work on Vimeo.

Bednarczyk was among 100 unemployed men and women interviewed for a powerful new video project, “Over 50 and Out of Work,” by New York journalists Susan Sipprelle, Samuel Newman, and Nikolia Apostolou. … Learn More