Posts Tagged ‘Retirement’

Is Long Term Care at the Center of the National Credit Debate?

Posted on August 10th, 2011 by Em-Power Services

There’s an excellent article on the web site “Helping You Care” (which is a quasi non-profit organization based in Florida) that points to the fact that within in the S&P downgrade was a strong reference to the issues around long term care.

The article notes, “In all the political finger pointing and hot rhetoric, few have noticed that in its Rationale for its current rating action, S&P specifically cites its previous report, “Global Aging 2011: In The U.S., Going Gray Will Likely Cost Even More Green, Now,” issued on June 21, 2011. In that report, S&P warned that a “looming U.S. fiscal bill is growing as the population gets older,” and that “the challenges facing the U.S. are more severe than those facing many of the other major industrial societies … because of its rapidly escalating health care costs.”

S&P’s June, 2011 report introduced the subject by stating:

“As the baby boomers start to reach retirement age, the percentage of the U.S. … population eligible for government support will begin to mount. Babies born in 1946 turn 65 this year and will become eligible for Medicare. They will also be entitled to start collecting full Social Security retirement benefits next year, under the current system. The U.S. government, however, is not currently collecting enough money to pay its Medicare, Social Security, and other long-term bills.”

In that June report, S&P pointed out, “In 2010, there were 26 retirees for every 100 members of the U.S. labor force. By 2050, however, we expect that there will be 50 retirees per 100 workers. In other words, the U.S. will go from four workers to support every retiree to only two.” [End of Quote]

The June S&P report, along with comments today from leaders in Washington, point to the fact that the future of long term health care as covered by Medicare and Medicaid are far from set in stone. In many cases, this were already a myth since they required dilution of retirement and other assets before being able to access.

As the debt ceiling discussion becomes more and more about health and long term care costs, those planning for their retirement will want to take every measure to protect themselves for the future, and that includes considering long term care insurance.

You can see the detailed article here.

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Planning for the “New” Retirement

Posted on July 19th, 2011 by Em-Power Services

An article published Associated Press writer David Carpenter takes an excellent look at how financial requirements.

Carpenter notes that big changes are coming to Medicare coverage by 2014, and that it’s now essential to include prospective health care costs in retirement planning. He recommends that retirees consider buying “Medigap” insurance and that “pre-retirees should consider buying long-term care insurance”. The reason is that a three year stay in a nursing home facility currently runs about $250,000 and will only increase.

Planning for heath care costs becomes even more important when you factor in some other issues about the “new” retirement.

First, notes Carpenter, is that retirees don’t spend less like they used to. With more active retirements now the norm, spending on travel, hobbies, and leisure activities has increased dramatically. He also notes that retirees won’t automatically be in a lower tax bracket.

Carpenter believes tax rates are likely to increase both at the Federal and state levels. He also makes the point that many retirees have paid off their mortgage, which removes those tax deductions. Some long-term care insurance policies offer tax deductions at the Federal and state levels, depending on where you live.

The point Carpenter drives home is that retirement isn’t what it used to be. Not only are we living longer more active, longer retirements, but we’re increasingly likely to need health at various points during this time in our lives, including potentially long-term care. Those who are planning for retirement need to think about how those health care needs will be managed without depleting savings.

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