Boomers Willing to Set Aside 1 Percent of Earnings Toward LTC Services, Health Expenses

Concerned about their future financial and health security, a substantial majority of older Americans would favor setting aside a portion of their earnings in a special account to save for future medical expenses not covered by Medicare, according to a new Commonwealth Fund survey report.

Sixty-nine percent of a nationally representative sample of 2,000 adults ages 50 to 70 support dedicating 1 percent of their earnings to a new Medicare health account to help them pay for long-term care (LTC) services or other uncovered health care expenses. The idea of saving for such an account drew broad-based support among older Americans regardless of income, political affiliation, geographic region and health status. A strong majority of people ages 50 to 64 also said they would like to participate in Medicare before turning 65.

“The Commonwealth Fund Survey of Older Adults” shows that a large majority of people in the 50-to-70 age group fear they will not have enough income and savings to retire and afford needed medical care. Only 15 percent of those ages 50 to 64 and 22 percent of those between 65 and 70 felt assured that they would have enough income and savings for retirement.

About half (48 percent) of adults ages 50 to 70 have retirement savings of less than $50,000, and about two of five (38 percent) have savings of less than $25,000. Retiree benefits are becoming increasingly rare: the majority (53 percent) of those working or with a working spouse said they would not have job-based retiree health benefits when they retire. This insecurity is eroding confidence: three of five (63 percent) adults ages 50 to 70 worry that they will not be able to afford medical care in the future. (See “Interest in Medicare Health Accounts Is Strong Across Income Groups”)

www.cmwf.org

INTEREST IN MEDICARE HEALTH ACCOUNTS IS STRONG ACROSS INCOME GROUPS

Copyright WorldatWork Sep 2005