The Road to Recovery
The good news is that the Great Recession is over, and we’re steadily seeing signs of economic improvement. However, the impact of the recession is still felt by those who are planning for retirement, and will be for many years to come. It used to be that seniors automatically retired at age 65, but today’s generation of soon-to-be retirees faces a new reality.
Many saw their retirement plans take a hit due to poor economic conditions during the recession. With portfolios continuing to recover, seniors often keep working past the age of 65. Most are doing so out of necessity, in order to save more for retirement. Higher taxes also play a role, with some workers taking home less of their paycheck (and therefore having less disposable income to invest) than they did previously. Some seniors have partially retired, but find themselves needing to work part-time in order to supplement their retirement income.
We’ve also seen great changes in healthcare, as lawmakers attempt to rectify enormous deficits in Medicare. Most seniors pay less into Medicare than they receive in benefits, so we expect changes to the public health care program in the future. As Medicare is restructured, more focus may be placed on preventive care, coordinated care, and free public wellness programs. Today’s seniors can expect to see a greater availability of aging-at-home programs, in an effort to cut costs and maximize Medicare’s efficiency. Those who work past age 65 continue to have access to employer-sponsored health insurance plans, so changes to Medicare may not impact them until they stop working.
As for Social Security, policy makers have been investigating changes to the way cost of living adjustments are calculated. In some cases this could result in smaller monthly checks for many seniors.
With many seniors and soon-to-be retirees facing a new reality, planning for retirement is more important than ever. Though costs of living, household budgets, and changes to Medicare and Social Security present a challenge, these obstacles can be overcome. With sound planning and realistic expectations, most can still find fulfillment in their later years.