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According to a Boston College study, "Health Care Costs Drive Up the National Retirement Risk Index", 44 percent of households will not be able to maintain their standard of living at retirement even if they wait until age 65 to retire. The study discussed the costs of rising health care needs and the lack of general awareness about the actual cost of care after retirement. Many individuals underestimate the financial cost of care and will end up shifting dollars from non-health consumption areas like travel and entertainment to health care.
In 2007 alone, out of pocket health care costs for Medicare beneficiaries were projected to be $3,800 annually. The study also mentions that research completed in 2005 for individuals age 65 indicates that nearly two-thirds will require some type of long term care, many for two or more years. In order to change this trend, individuals and families will have to save more and take more responsibility to adopt healthier lifestyle practices. This study and others may be accessed at http://www.crr.bc.edu/
As mentioned in other research, women are at particular risk in retirement due to years out of the workforce. Childbirth results in many women exiting the workforce for a number of years and then upon re-entry the previous level of employment and income is not usually regained. Additionally, when parents need care, it's often the female child who bears this responsibility. Add to this current divorce rates, and many women end up alone in retirement with lower levels of social security and retirement savings. So while all families need to plan, women especially need to make plans to be financially independent and able to provide care for themselves in their later years.Copyright 2011 Pamela D. Wilson, All Rights Reserved.
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