Health care costs drive up the National Retirement Risk index
- Collection:
- Health Policy and Services Research
- Series Title(s):
- Issue in brief (Center for Retirement Research)
- Contributor(s):
- Munnell, Alicia H. Soto, Mauricio. Webb, Anthony. Golub-Saas, Francesca. Muldoon, Dan. Center for Retirement Research at Boston College.
- Publication:
- Chestnut Hill, MA : Center for Retirement Research at Boston College, c2008
- Language(s):
- English
- Format:
- Text
- Subject(s):
- Health Care Costs Health Services Needs and Demand Retirement Aged Health Expenditures Income Long-Term Care -- economics Middle Aged Risk Assessment Humans United States
- Genre(s):
- Technical Report
- Abstract:
- The National Retirement Risk Index has shown that even if households work to age 65 and annuitize all their financial assets, including the receipts from reverse mortgages on their homes, 44 percent will be 'at risk' of being unable to maintain their standard of living in retirement. More realistic assumptions regarding earlier retirement and reluctance to annuitize 401(k) balances or tap housing equity would put the percentage 'at risk' even higher. But these previous analyses have not addressed rapidly rising health care costs. When these costs are included explicitly, the percentage of households 'at risk' increases dramatically. This brief explores how rapidly rising health care costs enter the NRRI calculations. It begins with a recap of the NRRI, then describes the health care landscape facing older Americans, and finally reports the results of incorporating retirement health care costs explicitly into the Index. The results show that once health care is considered explicitly, the percentage of households that will be 'at risk' rises from 44 percent to 61 percent. As always, the percent 'at risk' is greater for those at the low end of the income distribution. And later cohorts show more 'at risk' than earlier ones due to the combined effect of a contracting retirement income system and continually rising health care requirements.
- Copyright:
- Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY license. (More information)
- Extent:
- 12 p.
- Illustrations:
- Illustrations
- NLM Unique ID:
- 101469334 (See catalog record)
- Permanent Link:
- http://resource.nlm.nih.gov/101469334