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By Pamela D. Wilson, The Care Navigator,
“Most people, if they look at their life expectancy and they think they will live to 90, are nuts to retire at 60. They’re going to be living in poverty at 80,” according to Peter Morici, economist at the
According to Americans for Secure Retirement (www.paycheckforlife.org), a typical 65 year old woman has a 31 percent chance of living to age 90 or older, as compared to only 18 percent for a typical 65 year old male. This indicates that women need to take more responsibility saving for their own retirement and rely less on spousal retirement plans or social security which replaces only a small amount of monthly income.
Another complicating factor in planning for retirement is the change in health that occur as we age not only for ourselves but for our family members. Health care costs continue to climb as do annual premiums for health care coverage. Thirty seven percent of workers are forced into early retirement. Of these, 28 percent retire because of their own health problems and another 25 percent have to leave the workforce to care for a family member.(2)Additionally health care costs for older adults increase due to many chronic conditions. We’re simply living longer with more health issues. For example, prescription drugs and medical co-payments sometime result in the choice between paying for prescription drugs, medical costs or other necessities like food or utilities.
According to research completed by the Commonwealth Fund, the most expensive 5% (www.commonwealthfund.org), of Medicare beneficiaries, those in the poorest health, were responsible for 43 percent of total Medicare costs, with an average spending of $63,000 per beneficiary per year. As one may imagine, beneficiaries with higher expenditures have higher out of pocket costs. According to research conducted by ABC News, the Kaiser Family Foundation and USA Today, 1 in 4 Americans say their family has had a problem paying for medical care during the past year, up seven percent over the past nine years (1).
Curious to know how much you’ll need to save for retirement? You’ll find a no cost retirement calculator at www.newretirementcalculator.com. Remember, the one expense that most pre-retirees don’t consider is the cost of care when health issues occur and whether they will continue to live at home, move to an assisted living facility or need skilled nursing care. This single annual expense can quickly wipe out retirement savings. The cost of health insurance is also an overlooked surprise for many.
The main way to protect your retirement savings for the purpose of retirement or to protect it to pass along to family members is to purchase long term care insurance which protects retirement income and pays for the cost of care wherever you wish to live. The younger and healthier you are when you purchase a policy, the better rate you receive and the lower your overall policy expense. If you are interested in a long term care insurance quote, please contact me at (303) 810-1816 and I will thoroughly explain all of the options in order to educate you about the possibility of utilizing this important option in protecting your future.
(1) Retirees: Living Standards At Risk, The
(2) Helping Clients Offset Costs With Supplemental Health Options, June 2008, Agent’s Sales Journal, p. 21.
Copyright 2011 Pamela D. Wilson, All Rights Reserved.
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