IBA SUCCESS MAGAZINE Volume 5 Issue 3 | Page 8

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 6 IBA Success Magazine n 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.