Aging Matters | Economics of Aging

In this edition of Aging Matters, Nashville Public Television examines the costs and financial impact of aging and hears from people navigating financial decisions now. Have we saved and planned enough so our finances will last as long as we do?  The average person turning 65 this year will live to be 85 years old.  But one in five will live to be 90. One in ten will live to be 95.
Will we be able to afford the quality of life we want?  The future is always uncertain, but what is important is that we take time to look ahead, discuss and prepare for the economics of aging. 

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Economics of Aging | Panel Discussion

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Statistics Explained

For Americans ages 55-64, the median retirement account holds $111,000. 
Source: 401(K) / Ira Holdings In 2013: An update from the SCF, Munnell, Center for Retirement Research at Boston College. [link
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Roughly a third of Americans will rely on Social security as their only source of income in retirement.  
Source: Fast Facts & Figures about Social Security, 2014 pg. 8, Social Security Administration.  [link
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Almost 70% of people turning age 65 will need long-term care at some point in their lives.
Source: Who Needs Care?, LongTermCare.gov, U.S. Department of Health and Human Services.  [link
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The average person turning 65 this year will live to be 85 years old. They will retire at age 62.
Source: Gallup Poll, Economy April 28, 2014.  [link
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Taking care of dependents is a common reason that baby boomers delay retirement.  A third of boomers are in the sandwich generation—caught between caring for older relatives  and rearing children
Source: The Sandwich Generation, Pew Research Center, January 30, 2013. [link
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Half of American households may be unable to maintain their standard of living in retirement—according to the National Retirement Risk Index.  Some experts flat out say that to have a financially secure retirement in the 21st century means working longer, saving more and passing fewer assets on to heirs.
Source: National Retirement Risk Index, Munnell, Webb and Golub-Sass, Center for Retirement Research at Boston College. [link
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The  average person turning 65 today can expect to live to be about 85. One in five will live to be 90. One in ten will live to be 95.
Source: Calculators: Life Expectancy, Official Social Security Website, Social Security Administration. [link
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The resources for retirement income that exist today are different from those for retirees a generation ago. Pensions that once guaranteed monthly income for life are being replaced by the 401-k, a retirement plan where the risks and responsibilities of investing lie with the employees rather than employers.
Source: Pension Coverage of All Workers, by Type of Plan, 1989-2013, Center for Retirement Research at Boston College. DATA Source: 1989-2013 Survey of Consumer Finances. [link
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For American households aged 55-64 with a retirement plan, retirement investments hold a median amount of $111,000.  For Americans 55-64 the median household income is $55,100 a year, the average credit card debt is 3-thousand dollars and the net worth is $165,900.
Source: 2013 Survey of Consumer Finances, U.S. Board of Governors of the Federal Reserve System, [link]
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The earliest someone can claim a social security benefit is at age 62.  But those benefits are lower than they would be if drawn later.  The monthly social security benefit continues to grow by 8-percent each year that a person delays drawing it until age 70. No matter what age you choose to claim social security, that benefit amount is locked for the rest of your life.
Source: The Social Security Claiming Guide, Center for Retirement Research at Boston College. [link
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In Tennessee, the average cost for a room in an assisted living facility is 34-hundred dollar per month; 6-thousand dollars a month in a nursing home.
Source: 2014 Cost of Care Survey, Genworth Financial [link]
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Fewer than 10-percent of Americans are saving and planning specifically for long-term care, according to the Robert Wood Johnson Foundation.
Source: Long-Term Care: What Are the Issues?, Health Policy Snapshot, February 14, pg. 6,   Robert Wood Johnson Foundation. [link]
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State Medicaid programs are shouldering the burden of long-term care expenses—increasing at an average of 7-percent a year.  States now spend more on Medicaid than on K-12 education.
Source: State Expenditure Report: Examining Fiscal 2012-2014 State Spending, National Association of State Budget Officers (NASBO). [link

Additional Resources

The Social Security Claiming Guide
Answers frequently asked questions about how and when to draw on Social Security created by the Center for Retirement Research at Boston College.
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AARP Retirement Calculator
A personalized snapshot of what your financial future might look like.
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Paying for Senior Care
An online resource for understanding financial options related to long term services and supports.
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TN Commission on Aging & Disability
The Commission is dedicated to working for older Tennesseans and adults with disabilities by providing leadership and guidance for a system that promotes health, dignity, independence, and security through an array of community and in-home services, the protection of rights, and the implementation of best practices.\
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Property Tax Relief Program in TN
Online resource to explore eligibility for Tennessee’s Property Tax Relief Program