weekly blog--one for the ages
GoBankRates came up with a formula to determine how much income is needed in each state to cover living expenses in retirement, and then added an additional 20 percent to account for the “comfortable” aspects of retirement. The best and worst below.
Best Mississippi--$53,000 Oklahoma--$55,000 Arkansas--$55,000 Missouri--$55,000 Michigan--$55,000 Worst Hawaii--$118,000 District of Columbia--$101,000 California--$86,000 New York--$84,000 Massachusetts--$83,000 And then there is what’s known as “The Forgotten Middle” — older adults who don’t have enough money to pay for the housing out-of-pocket but aren’t poor enough to qualify for Medicaid, which covers some long-term care costs for lower-income Americans. By 2029, middle-income people 75+ are expected to comprise 43% of the total population of people that age, according to a survey. 60% of middle-income adults age 75 and older will have mobility limitations, 20% will have three or more chronic conditions and one or more functional limitations and 8% will have cognitive impairment. The study estimated that assisted living rent and other out-of-pocket medical expenses will cost $60,000 annually, on average, by 2029; independent living and medical out-of-pocket costs will be about $45,000 annually, on average. One economist estimated that if assisted living costs could be lowered by $10,000 annually, an additional 2.3 million middle-income Americans age 75 and older could afford them. Unfortunately, the bottom line is that most middle-income seniors will lack the financial resources required to pay for private seniors housing, regardless of their preferences. Even if seniors devote 100 percent of their annual income to seniors housing—setting aside any personal expenses—only 19 percent of middle-income seniors will have financial resources that exceed today’s costs of assisted living. Many seniors treat housing equity differently from other financial resources and attempt to liquidate other income and assets before liquidating the equity. Such housing equity may be the family home that some older adults keep as a nest egg to protect against future, unexpected financial hardship or wish to preserve for their children. However, if we assume that middle-income seniors do draw down housing equity, 54 percent (7.8 million) will still lack the resources to pay for seniors housing at today’s costs. This confluence of factors creates a significant unmet future need, which demands new housing and care solutions to support the emerging generation of America’s seniors. Creating and financing those solutions will require innovation from public and private stakeholders to bring more affordable seniors housing options to the market and to enable people at all income levels to access the care they need and want as they age. Learn More: https://www.nextavenue.org/forgotten-middle-afford-senior-housing/?hide_newsletter=true&utm_source=Next+Avenue+Email+Newsletter&utm_campaign=ac82459cdd-09.24.2019_Tuesday_Newsletter&utm_medium=email&utm_term=0_056a405b5a-ac82459cdd-165523841&mc_cid=ac82459cdd&mc_eid=4b8d7515b9 www.gobankingrates.com/retirement/planning/comfortable-retirement-cost-state/#2 https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2018.05233
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