Policymakers must address a compromised future for retirees. To summarize, the issues include an aging workforce, the related impact on Social Security and the disparity in estate recovery for the cost of long term care.
Specifically, a recent Washington Post article refers to what the aging workforce will do to the solvency of Social Security. Specifically, the smaller numbers of Gen X-ers and millennials are not enough to balance the growing number of retiring Boomers. As a result, Social Security could face a deficit by 2023, causing retirement to be challenging for many.
On a parallel path, more American will require long term care, which today can cost upwards of $12,000 a month on average. Therefore, families face a financial crisis to pay for this care. Sadly, this care is typically funded by spending down assets built over a lifetime until you are impoverished, Only then, will you will qualify for Medicaid.
According to economist Kathryn Ann Edwards, “We’ve known for 75 years that we had a really large birth cohort. Many of the quote-unquote problems related to that aren’t from their numbers. It’s problems that come from us not making policy to address what those numbers would mean.”
In addition, the specific issue of Medicaid recovery was addressed in a post on the UMass Boston Gerontology Institute blog. Based on data driven research, critics argue that people with sizeable wealth are often able to legally shield assets from Medicaid estate recovery. Therefore, they say, the burden of Medicaid estate recovery falls primary to those of modest means. In addition, this may disproportionately affect people of color given disparities in household wealth.
Given all of this, how should policyholders address a compromised future for retirees? Examples include:
-Older Americans need significant reasons and incentives to stay in the workforce longer
-New policies for legal immigration need to fuel entrants to the workforce
-Americans should be on an equal playing field in terms of options for paying for long term care
Interested in being part of a thought leadership discussion on a compromised future for retirees? Contact us at AgePros.net.
Access the UMass Boston Gerontology Institute and Washington Post posts below:
https://www.washingtonpost.com/technology/interactive/2023/aging-america-retirees-workforce-economy/
https://blogs.umb.edu/gerontologyinstitute/?s=medicaid+recovery
Reported by AgePros.net, the only blog for aging industry professionals.
