EXPERTS LANE n RETIREMENT & HEALTH CARE
Sometimes You Have No Choice:
Baby Boomers and Health Care
By Laura Dorsey
A
rsenio Hall had a segment on his
late-night show during which he
pondered certain thoughts and
referred to them as, “Things
That Make You Go Hmmm”. That is what
this article is, just an FYI to make you go
hmmm.
istration, this benefit really only compen-
sates for about 40 percent of an average
wage earner’s income after retiring. So,
unless Baby Boomers plan to reduce life-
styles and expenses, Social Security retire-
ment benefits probably will not cover all,
or even a part of, future living expenses.
According to some calculations, a person
with a $40,000 annual income needs $1.5
million to comfortably retire. If that figure
were not steep enough, the fact is that this
figure does not include health costs.
Each month, nearly 63 million people re-
ceive a benefit check, of whom 43.7 mil-
lion are retired workers. Of these retirees,
better than 60% rely on their payout for at
least half of their income, with a third es-
sentially leaning on the program for all of
their income. Just an FYI, Social Security
retirement benefits were never intended
to fully replace your prior earnings. In fact,
according to the Social Security Admin- No matter how prepared Baby Boomers
think they are for retirement, many are
likely to fall short when medical costs are
concerned. High health-care costs in the
United States make it difficult to actual-
ly be prepared for retirement. Retired
65-year old couples can expect to pay
$275,000 in out-of-pocket expenses for
health care, excluding long term nursing
care and rehabilitation—but only have
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IBA Success Magazine
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VOL 5, Issue 3
a 50% chance of covering these costs.
Health care costs are increasing faster
than economic growth.
THEN…YOU HAVE NO CHOICE
No matter how carefully the Baby Boomers
plan for retirement, something may still go
wrong with the plan. “The best-laid plans of
mice and men often go awry”. Health is one
factor, with chronic health conditions co-
ercing some people to make decisions that
they had not planned for. Sometimes, you
have no choice and what do you do then?
I am going to share the stories of individu-
als that found themselves in this situation,
where they had no choice. The names have
been changed to protect their privacy, but
I have been given permission to tell their
stories. I share these stories with you so that
you can go hmmm... and maybe be aware
of not only your choices, but aware of the
choices that people around you have to
make by no choice of their own.
Baby Boomers, those of us born between
1946 and 1964, are heading to retirement
in droves, at the rate of 10,000 each day.
In 2008, the first baby boomers reached
age 62 and the last will reach full retire-
ment in 2031. That will mean that there will
be approximately 75 million people over
the age of 65 in the United States. That is
not the shocking statistic. The fact is that
almost 40 million households have no
retirement savings at all according to the
National Institute on Retirement Security.
How are so many people going to survive
their golden years, let alone enjoy them?
As more and more Americans are looking
ahead to retirement, for some, the real-
ity of not having enough income to pay
the bills may be setting in. Even with in-
come benefits from Social Security, many
retirees are finding that it is necessary to
return to a job or cut back on their living
expenses. This is not what we wanted for
our golden years.