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USA Today
a day ago
- Health
- USA Today
Most Americans think Medicare covers long-term care. Are they right?
Most Americans think Medicare covers long-term care, the regimen of daily help that many seniors will eventually require. It does not. That basic misunderstanding has retirement experts worried. It suggests millions of Americans may have no plan to cover the high costs of aging. Long-term care is a range of services for people who need help with everyday activities, such as bathing, dressing or eating. More than 80% of us will need that help at some point, according to a recent study from the Center for Retirement Research at Boston College. Americans are badly misinformed about the basics of long-term care, a point driven home in numerous surveys and studies. One of the latest, released in June by Nationwide, found that 58% of U.S. adults wrongly believe Medicare covers long-term care. 'Seventy percent of the people who reach 65 are going to need long-term care,' said Holly Snyder, president of Nationwide Life Insurance. 'And if you get there, people seem to think there are public safety nets that will take care of you.' Long-term care costs can be staggering Many seniors need long-term care for years. Costs can be staggering. The average assisted living facility charges $5,350 a month, according to T. Rowe Price. A typical nursing home charges $9,733. Those prices should alarm older Americans. The problem, according to Snyder and others, is that many people assume Medicare will cover them. 'People just don't distinguish between long-term care and health care,' said Gal Wettstein, a senior research economist at Boston College. Some confusion is natural. Medicare, the federal health insurance program for seniors, does cover some short stays in nursing homes. But Medicare generally does not cover longer stays. The reason: Most long-term care is not considered medical care. 'Someone to make sure Mom eats her food, takes her medicine and, when she wakes up, she doesn't walk out the door: That's custodial care,' said Patrick Simasko, an elder law attorney in Michigan. And here's where things get really confusing: While Medicare doesn't cover most long-term care, Medicaid does. Medicaid, the government health insurance program for Americans of limited means, generally covers long-term care for seniors who spend down their assets. In fact, Medicaid is the nation's largest payer of long-term care. Many Americans 'confuse Medicare and Medicaid,' Simasko said. Why don't more Americans have long-term care insurance? The pervasive belief that Medicare covers long-term care may also help explain why so few Americans own long-term care insurance. Long-term care insurance does just what the name implies: It covers costs of long-term care. Yet, by one industry estimate, only about 4% of older Americans hold policies. Why do so few Americans purchase long-term care insurance? 'Because so many people think Medicare covers it,' Wettstein said. 'They don't want to buy a product that they think they already have.' The notion that Medicare covers long-term care is one of several prevalent misconceptions about the costs of aging. In the Nationwide survey, 41% of respondents said they doubt they will live long enough to use long-term care insurance. In fact, most seniors will eventually need it. The Nationwide survey reached 1,324 adults, ages 29 and up, with household incomes of at least $75,000. Another survey, fielded in 2024 by the Employee Benefit Research Institute (EBRI), found that only four in 10 workers believed they would need long-term care. In that survey, employees also vastly underestimated the costs of long-term care, with most believing the tab would not exceed $50,000. 'There's been so much focus on saving for retirement, accumulation, but there's not much talk about addressing the risks associated with aging,' said Bridget Bearden, research and development strategist at EBRI. Americans underestimate long-term care as a retirement risk Many older Americans underestimate long-term care as a retirement risk. In one 2024 survey of affluent older Americans, Boston College researchers found, long-term care ranked fifth among financial worries in retirement, behind stock market turbulence, Social Security cuts and other concerns. Many Americans don't grasp the implications of tapping Medicaid to cover long-term care, Wettstein said. To qualify for the benefit, as a rule, you must spend all of your money. 'It's an insurance product that has 'everything you own' as a deductible,' Wettstein said. 'You have to spend everything you own in order to use it.' Medicaid requirements yield a long-term care industry of haves and have-nots, according to Wettstein and others. Only affluent Americans can easily afford long-term care costs out of pocket. And only impoverished Americans get it for free. 'When you get old, you'd better have a lot of money, or you'd better be broke,' Simasko said. 'It's those in-between people who are having a hard time.' If this report has you worried about long-term care, here are a few expert tips. Consider long-term care insurance Many Americans consider long-term care insurance prohibitively expensive, Snyder said. In fact, long-term care policies come in many varieties. Costs rise and fall dramatically according to the dollar amount of the benefit, the length of care covered, and other variables. A typical policy, providing a $165,000 benefit for a single adult of 55, might cost $950 a year for a man, $1,500 for a woman, the National Council on Aging reports. One big drawback to many traditional long-term care policies: You collect no money if you get no care. But the industry is evolving. Under various 'hybrid' policies, if you don't exhaust the long-term care benefits, they go to your beneficiaries when you die. Shop around for long-term care Long-term care costs vary widely depending on where you live. Assisted living costs average $8,093 a month in Albany, N.Y., but only $4,600 in Boulder, Colorado, according to the National Council on Aging. If you live in a high-cost city, look at prices in the suburbs, or in the next county. Consult a cost-of-care calculator. You could buy yourself more years of care. 'Find the best place for the best price,' Simasko said. Meet with a retirement planner Financial planners are trained to help people budget for all the potential costs of retirement, including long-term care. A retirement planner can help you unpack the complexities of long-term care and craft a plan to pay for it. 'It really is about talking to your financial professional,' Snyder said.
Miami Herald
13-06-2025
- Business
- Miami Herald
Tony Robbins sends strong message to Americans on 401(k)s, IRAs
As life expectancy increases, many American workers are rethinking their approach to saving and investing for retirement. Finance expert and motivational speaker Tony Robbins acknowledges this reality and emphasizes a key strategy involving 401(k) plans and Individual Retirement Accounts (IRAs) to make the prospect of longer lives something to celebrate rather than fear. Don't miss the move: Subscribe to TheStreet's free daily newsletter Relying solely on Social Security for financial security in retirement is not a wise course of action - especially considering how extended lifespans are lengthening the amount of time people spend on this planet beyond their working careers. According to Robbins, an average retirement lasted near 12 years, half a century ago. Today, it is common for it to stretch beyond 20 years. Related: Jean Chatzky sends strong message to Americans on Social Security Importantly, the Center for Retirement Research (CRR) has found that about half of U.S. households risk falling short on funds needed to sustain their current standard of living in retirement. Robbins encourages Americans to assess their 401(k) and IRA options early in their careers and make informed financial choices that can support a stable future. He offers some key thoughts on this subject for the many workers trying to find a way to sort it all out. Getty Robbins advises workers to take full advantage of any 401(k) contribution matching offered by their employers, as it's essentially free money that can significantly boost retirement savings. For those with the option to choose a Roth 401(k) - which allows people to pay taxes up front so they can withdraw funds tax-free in retirement - he strongly recommends doing so. His reasoning is simple: Robbins believes one's taxes are likely to be higher during retirement. If that assumption holds true, then it would be smarter to pay them at today's lower rates rather than later. More on retirement: Jean Chatzky shares major statement about Social SecurityShark Tank's Kevin O'Leary has blunt words on 401(k) plansDave Ramsey strongly cautions U.S. workers on Social Security Making proactive decisions about investing in defined contribution (DC) plans - such as 401(k)s - is especially important given the long-term impact of financial hardships Americans have experienced going back to the financial crisis of 2008. "Households' retirement preparedness in all income groups was heavily affected by the Great Recession," the CRR found. "The middle and the highest thirds saw significant improvement from 2010-2019 due to rebounding housing and equity prices. In contrast, households in the bottom third saw virtually no improvement as they are less likely to own a house and participate in DC plans, and have few financial assets." Related: Shark Tank's Kevin O'Leary warns Americans on Social Security problem In his book, "Money: Master the Game," Robbins wrote that he frequently receives questions about whether setting up a Roth IRA is a smart move for retirement planning. His stance is clear - it's a resounding yes. A Roth IRA, much like a Roth 401(k), requires individuals to pay taxes on their contributions up front. The benefit? Again, once retirement arrives, withdrawals come free of tax burdens, offering financial flexibility in later years. In 2025, contribution limits for Roth IRAs are set at $7,000 for those under 50 years old. Those aged 50 and above can make an additional $1,000 catch-up contribution to bolster their retirement savings. However, income eligibility plays a role in determining how much one can contribute. To contribute the full amount, an individual's modified adjusted gross income (MAGI) must be below $150,000. For married couples filing jointly, the threshold is $236,000. Robbins emphasizes that taking advantage of these accounts is a strategic move, helping investors secure their financial future while making tax-efficient decisions. As mentioned above, with lifespans growing longer, preparing for retirement with the right tools - especially tax-advantaged accounts such as Roth IRAs - can turn financial uncertainty into a well-planned, secure future. Those who are eligible should strongly consider leveraging these opportunities as they strive to build a rewarding retirement. Related: Dave Ramsey warns Americans on Social Security The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
04-06-2025
- Business
- Yahoo
5 Remote Jobs That Make It Easier To Work Longer — and Save More
Are you ready for retirement? A study from the Center for Retirement Research found that American workers aged 55 and up who work remotely at least one day a week were 14.4% less likely to retire by the following year than in-person workers. Are you surprised? Read Next: Check Out: As you approach retirement age, commuting to the office every day of the week isn't ideal, especially if you face endless traffic. In this article, we'll cover five remote jobs that make it easier to work longer and save more before you sign off for retirement. A virtual assistant handles administrative tasks like appointment scheduling, customer support and email management. This role is crucial to the success of an organization and can be completed 100% remotely. Some virtual assistants work with multiple organizations during the week, while others choose to work for one company. A virtual assistant role is a great job if you are trying to extend your work years. You could make an average salary of $46,290 per year, according to Glassdoor. See Next: Many companies in the United States are switching back to domestic customer service. Customer service representatives answer customer questions, complaints and everything in between. This position can be completed remotely, helping you extend your work hours. The average salary of a customer service representative is $39,311 per year, according to Glassdoor. Despite what you might believe, there is still a need for human data entry. While data entry roles may not pay the big bucks, they can be a great way to save more for retirement from the comfort of your own home. The average salary for a remote data entry position is between $35,000 and $53,000 a year, according to Glassdoor. Some companies never switched back to an office setting. Companies need a receptionist to manage incoming calls, emails and general administrative tasks even with no physical location. If you enjoy communicating with customers and handling administrative tasks, a remote receptionist position might be for you. The average salary for a front desk agent is $38,775 per year, according to Glassdoor. If you have any training or experience in accounting or finance, there are countless remote positions available. From completing general bookkeeping services at one company to freelancing and taking on different clients each month, remote work is normal in bookkeeping and finance. The average salary for remote bookkeeping is $58,274 per year, according to Glassdoor. If you like maintaining accounting records and transactions or working with numbers, a job in remote bookkeeping and finance might be for you. More From GOBankingRates How Much Money Is Needed To Be Considered Middle Class in Every State? 4 Affordable Car Brands You Won't Regret Buying in 2025 This article originally appeared on 5 Remote Jobs That Make It Easier To Work Longer — and Save More Sign in to access your portfolio
Yahoo
22-05-2025
- Business
- Yahoo
Work till you drop? Here's why America's average retirement age keeps rising.
The average retirement age of American workers is creeping steadily up, according to a new report from a prominent economist. And that trend invites a question: When will America's retirement age stop rising? Over the past three decades, the average retirement age has risen by about three years, economist Alicia Munnell reports in an April research brief. The typical retirement age in 2024 was 64 for men, 62 for women. The upward trend is slow, but striking. In 1994, the average man worked to age 61, while the typical woman clocked out at 59. We're working longer for several reasons: Americans are living longer, staying healthier, and working in less physically demanding jobs. Workplace pensions have given way to 401(k) plans, which reward workers who delay retirement. Social Security changes have pushed the 'full retirement' age from 65 to 67, penalizing those who claim the benefit earlier. Fewer employers offer health insurance to workers who retire before 65, the year Medicare benefits begin. 'There were a lot of forces that encouraged people to work longer,' said Munnell, senior adviser at the Center for Retirement Research at Boston College, an organization she founded. Does the trend toward later retirement bode well or ill for American society? Among retirement researchers, opinion is divided. If Americans were working longer to stave off poverty, then a rising retirement age would be a bad thing, said Andrew Biggs, a senior fellow at the American Enterprise Institute. But he doesn't see that happening, at least not for most Americans. 'They're getting higher Social Security benefits, and the benefits they're getting from private retirement plans have increased,' he said. 'So, they don't need to work to stay out of poverty.' Whether American retirees have enough savings and benefits to live comfortably in retirement is, however, a matter of spirited debate. In a viral 2024 op-ed, Biggs made the case that most retirees are managing just fine, even with relatively modest savings. On the other hand, a 2024 AARP survey found that one-fifth of over-50 adults have no retirement savings, and that many worry they won't have enough funds to last through retirement. 'So, for a meaningful share of workers, postponing retirement is likely a necessity to keep their main income stream going,' said Nicola Bianchi, assistant professor of strategy at Northwestern University's Kellogg School of Management. American workers have decidedly mixed emotions about retirement. Millions of Americans dream of retiring early. As we age, dreams give way to reality, and many workers resolve to remain employed for as long as they can. The average over-50 worker expects to retire at 67, according to the Transamerica Center for Retirement Studies. 'Today's workers envision extending their working lives beyond traditional retirement age because they want and need to work,' said Catherine Collinson, CEO of the Transamerica Center. In the end, though, many of us retire earlier than we had planned, often because of corporate downsizing or declining health. Munnell's research sought to divine whether average retirement ages will rise further in years to come: One day, will most Americans work to age 70? Probably not. Munnell concluded that the upward trend has likely peaked. 'There are all these forces that pushed up the average retirement age, beginning in the mid-'90s,' she said. 'And the thing that struck me is that every one of them seems to have played itself out.' The gradual uptick in Social Security's full retirement age is done, with no more changes planned. The shift from pensions to the 401(k) is complete, and half of American workers now participate in the plans. Meanwhile, the trend toward longer and healthier lives has slowed. In the calculus of American retirement, two specific ages loom large. One is 62, the year most Americans become eligible for Social Security. The other is 65, the year Medicare kicks in. It's no surprise that the average retirement age for men and women falls between those years, said Craig Copeland, director of wealth benefits research at the Employee Benefit Research Institute, or EBRI. 'I think those two years are going to be key,' he said. 'Unless those are moved, I don't see that the average retirement age is going to move much.' The share of Americans who claim Social Security at 62 has dropped dramatically in recent decades. Based on expected longevity, most of us are better off financially if we wait until 70 to claim the benefit. Even so, 62 remains the most popular age for Americans to claim Social Security. Munnell predicts the average retirement age may actually decline in 2025, for a reason that she might not have predicted in 2024. The Trump administration's cost-cutting campaign across federal government has triggered a torrent of new Social Security claims this year. New claims were up by more than 15% in March, compared with the same month in 2024. Munnell and others ascribe the surge to widespread fears about the stability of the retirement trust fund, amid staff cuts, rule changes, website outages and leadership shuffles. 'They're all racing in to claim benefits, which means they're likely to stop working earlier than they had planned,' she said. Future policy changes could determine whether America's retirement age continues to rise. Republicans in Congress have periodically proposed raising the full retirement age for Social Security, although President Trump has pledged not to touch it. If the age of eligibility for full Social Security benefits rose from 67 to, say, 70, America's average retirement age would probably resume its upward drift, Munnell said. If Congress were to raise the age of eligibility for Medicare, retirement ages could rise even more dramatically. But retirement experts say it's hard to imagine that scenario, given the high costs of health insurance. 'I don't see that happening,' said Copeland of EBRI. This article originally appeared on USA TODAY: America's retirement age is rising. Will the trend ever reverse? Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
07-05-2025
- Business
- Miami Herald
Economist schools Elon Musk on Medicare, Social Security, immigrants
Business Economist schools Elon Musk on Medicare, Social Security, immigrants Billionaire Elon Musk has never been a stranger to controversy, but some recent comments he made about immigrants, Medicare and Social Security elicited a thoughtful response from a research fellow at the Center for Retirement Research. Geoffrey Sanzenbacher, who is also an economics professor at Boston College, explained that as a general rule he would rather stay out of day-to-day news cycle drama, but those words got his attention. Don't miss the move: Subscribe to TheStreet's free daily newsletter Discussing his perception of waste and fraud in entitlement spending on Fox Business Network, Musk suggested that if it were eliminated, there was $600 billion to $700 billion annually that could be saved. "That's also the mechanism by which Democrats attract and retain illegal immigrants, by essentially paying them to come here and then turning them into voters," Musk said. "This is why the Democrats are so upset about the situation. If we turn off this gigantic money magnet for illegal immigrants, then they will leave and they will lose voters." Related: Shark Tank's Kevin O'Leary sends strong message on Social Security Sanzenbacher wrote about why he decided to publish a formal response to Musk's words. A Center for Retirement Research economics professor challenges Elon Musk's claim that immigrants come to the U.S. to collect Medicare and Social Security benefits. JEWEL SAMAD/AFP via Getty "When a prominent car manufacturer and space enthusiast currently in the Trump Administration claimed that entitlements are a way to attract unauthorized immigrants to the country to vote for Democrats, I'll admit that it caught my eye," he wrote. Economist reacts to Elon Musk's words on Medicare, Social Security Sanzenbacher explained his reasoning on how he decided what specific subjects to write about in his response. "Let's ignore the fact that unauthorized immigrants can't vote (and no one has turned up evidence that they fraudulently do in any large number)," he wrote. "Instead, let's focus on two reasonable questions." First, Sanzenberger examined whether these programs serve as an incentive for unauthorized immigrants to come to the U.S. More on retirement: His findings indicate that unauthorized immigrants are not eligible for Medicare or Social Security retirement benefits, and there is no substantial evidence that they receive these benefits fraudulently in large numbers. In fact, many contribute to these programs through payroll taxes without being able to claim benefits, which actually strengthens the financial health of the two federal programs. "To the extent that unauthorized immigrants 'participate' in these programs, they do so on the revenue side," Sanzenbacher wrote. "In short, mass deportations will hurt the programs' trust funds, not help them." Related: Scott Galloway sends strong message on Social Security, boomers Musk's claim that Medicare, Social Security incentivize illegal immigration is examined The second question Sanzenbacher addressed was whether expanding authorized immigration would negatively impact the financial stability of Social Security and Medicare. While the long-term effects are complex, research suggests that immigrants tend to be net contributors rather than financial burdens. They pay into the system, receive benefits, and have children who continue the cycle. "On the Medicare side, the potential for positive impact exists largely because immigrants spend less on health care than those born in the United States," Sanzenbacher wrote. "On the Social Security side, the potential for positive impact stems from this same feature – immigrants are often younger people who work," he continued. "This fact means that new immigrants contribute to the system at exactly the time we need it – as the baby boomers age." Sanzenbacher is careful to explain that he does not support unrestricted immigration, recognizing important concerns. For example, increased immigration could affect wages, especially in specific industries. Policies might need to target labor shortages in key professions. While immigrants contribute to long-term economic growth, short-term costs like education and infrastructure require fair distribution. These discussions are essential to shaping immigration policy. "However, we can never get to these sorts of questions if we start with the complete fiction that immigrants are coming here to take advantage of entitlements," Sanzenbacher wrote. "If anything, these programs take advantage of them." Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc. This story was originally published May 6, 2025 at 8:34 PM.
