Retirement Living News

January 2007

HEADLINES  (Click on headline to read story)

• New Survey of Employers Reveals One in Four
  Boomers Won't Retire Because They Can't
• AARP Announces Launch of Pilot Program for
  Discount Shopping on Its Web Site
• New Government Site Helps with Long Term Care Planning
• Survey Shows Health-Care Cost No. 1 Retirement Concern
• Census Bureau Reports Arizona Edges Out Nevada
  As Fastest-Growing State
• Is a Reverse Mortgage Right for You?

Archive of Past Issues                          New Retirement Communities

NEWS STORIES

New Survey of Employers Reveals One in Four Boomers Won't Retire Because They Can't 

To assess the employment prospects of older workers, the Center for Retirement Research hired Matthew Greenwald and Associates to conduct a survey of 400 private-sector for-profit and non-profit employers. These employers were asked about the relative productivity and cost of white-collar and rank-and-file workers age 55 and older and whether, on balance, older employees or job candidates were more or less attractive than their younger counterparts. The survey was supported by a grant from The Prudential Foundation. 

While generally encouraging, the survey results raise two important cautions. First, older rank-and-file workers, who face the greatest retirement income challenge, appear to have weaker employment prospects than older white-collar workers. Second, other surveys have shown that positive evaluations of the productivity of older workers do not necessarily translate into actual employment opportunities. 

The oldest of the Baby Boomers are now 60 years old. As this huge generation makes its way out of the labor force, it will do so on much different terms than those offered workers over the past quarter century. The share of earnings replaced at any given age by Social Security and employer plans will be less. And that income stream will also be less secure. Many observers are thus concerned that Boomers will be unprepared for retirement. However, if Boomers can delay retirement, they can raise their retirement income far more than workers could in the past. Working longer has thus emerged as an important option for improving retirement income security. 

Employers have a unique perspective on whether workers are prepared for retirement and on when they will retire. Employer-sponsored defined benefit pension and 401(k) plans are the most important source of retirement income for the nation's workforce, aside from Social Security. Moreover, employers must be able to predict when their older workers will retire in order to make effective staffing, training, and promotion decisions. And if continued employment is to emerge as a viable response to retirement income shortfalls, employers must be willing to create opportunities for work at older ages. To read the full 11-page report, go to: http://www.bc.edu/centers/crr/issues/wob_6.pdf
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AARP Announces Launch of Pilot Program for 
Discount Shopping on its Web Site

AARP is pilot testing a new benefit that enables members to enjoy significant discounts of up to 35 percent on more than 500 world-class name brand products, including digital cameras, flat screen televisions, small appliances, luggage and other merchandise. The program, called AARP MarketPlace, is being run by Power Merchandising Corporation (PMC), an exclusive Web site for discount shopping. 

AARP Services, Inc., announced the program last month. "This new member benefit was launched because we know that AARP members value the discounts and services that they receive with their membership," said Dawn Sweeney, President and CEO of AARP Services, a subsidiary that manages the wide range of products and services that are offered to AARP members. "More and more of our members are shopping online. 

Some of the brands that are available through AARP MarketPlace include: Sony, Motorola, Sharper Image, Tumi, Callaway Golf, Panasonic, Cannon and Garmin. The site can be accessed by AARP members at www.aarp.org/marketplace.
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New Government Site Helps with Long Term Care Planning

A new Web site launched last month by the U.S. Department of Health & Human Services will make it easier for consumers to get the information they need to plan for long-term care. The National Clearinghouse for Long-Term Care Information Web site provides comprehensive information about long-term care planning, services and financing options, along with tools to help people begin the planning process. 

The clearinghouse Web site is designed to increase public awareness about the risks and costs of long-term care and the potential need for services, and to provide objective information to help people plan for the future. It was designed by HHS' Administration on Aging (AoA), Centers for Medicare & Medicaid Services and the Assistant Secretary for Planning and Evaluation. 

"The National Clearinghouse for Long-Term Care Information Web site is an important step toward giving consumers the tools they need to take personal responsibility for planning for their future long-term care needs," HHS Secretary Mike Leavitt said. The site features a number of resources to help individuals start the planning process, including interactive tools such as a savings calculator, contact information for a range of programs and services, and real-life examples of how individuals have planned successfully. 

The clearinghouse includes the following: 

• Objective information to help consumers decide whether to purchase long-term care insurance or to pursue other private market alternatives that pay for long-term care;
• Information about states with long-term care partnerships under Medicaid;
• Information about the availability and limitations of coverage for long-term care under Medicaid. 

The new Web site also supports the "Own Your Future" education campaign, a joint federal-state initiative designed to increase consumer awareness about planning for long-term care. HHS recently announced new federal-state partnerships with several states designed to help Americans take an active role in planning ahead for their future long-term care needs. 

"The National Clearinghouse for Long-Term Care Information Web site is an essential component of the 'Own Your Future' campaign," CMS Acting Administrator Leslie V. Norwalk said. "Users can easily find information about services, resources and finances to help them plan for future long-term care needs.

" For more information about the "Own Your Future" campaign and the National Clearinghouse for Long-Term Care Information, visit: www.longtermcare.gov
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Survey Shows Health-Care Cost No. 1 Retirement Concern

Nearly one-third of Americans say not having enough money to pay for health care is the biggest concern facing our nation in retirement, well above others like working well into one's sunset years, according to a new survey sponsored by Edward Jones, an investment management firm based in St. Louis. 

"In many ways, Americans are saying they are concerned that health and medical costs are likely to take the biggest chunk out of their nest eggs," said Lindsey Wilkins, a partner and retirement planning expert at Edward Jones. 

In fact, those concerns appear real when faced with figures that health care spending is expected to reach $2.9 trillion in 2009 and $4 trillion by 2015. Furthermore, nearly half of those respondents nearest to retirement age (55 to 64 years old) are much more likely to be concerned about healthcare costs than younger Americans (43 percent vs. 10 percent), proving that retirement reality is very different from perception. 

The study, which was conducted by Kelton Research on behalf of Edward Jones, also highlighted that one in five respondents said they would have to rely on others to support them in retirement. Yet only one in 10 said they would have to work longer than normally anticipated to fund retirement. 

The baby boomer generation remains more positive about the future than others in the survey, with only 11 percent saying they expect to rely on others financially in their retirement. 

"Retirement planning often takes a backseat, with many people concentrating on the here and now, rather than their future," said Wilkins. "Seeking the right advice is vital to helping ensure financial security in your retirement. Putting away a small amount today can make a real difference tomorrow." 

Retirement concerns are not confined to those households with lower incomes. In fact, the reverse is true. Those with an income of more than $75,000 are much more concerned about paying for their healthcare later in life (33 percent) than those with an income of $25,000 (16 percent).
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Census Bureau Reports Arizona Edges Out Nevada 
as Fastest-Growing State

Texas gained more people than any other state between July 1, 2005 and July 1, 2006 (579,275). Florida and California followed, gaining 321,697 and 303,402, respectively. Rounding out the top five states were Georgia (231,388) and Arizona (213,311). The figures reflect all age groups, including retirees. 

Meanwhile, Arizona was the nation's fastest-growing state over the period, breaking Nevada's grip on the title, with its population rising 3.6 percent. Nevada ranked second this time, as its population climbed by 3.5 percent, followed by Idaho (2.6 percent), Georgia (2.6 percent) and Texas (2.5 percent). (See table below.) 

The South and West again monopolized the list of fastest-growing states with Utah, North Carolina, Colorado, Florida and South Carolina rounding out the top 10. Colorado and South Carolina replaced Delaware and Oregon on the list this year. 

According to the estimates, California remains the most populous state with a population of 36.5 million on July 1, 2006. Rounding out the top five states were Texas (23.5 million), New York (19.3 million), Florida (18.1 million) and Illinois (12.8 million). 

Other highlights: 

• North Carolina replaced New Jersey as the 10th most populous state. 
• The Northeast region grew by only 62,000 people. In contrast, the South grew by 1.5 million and the West by 1 million. The Midwest added 281,000 people.
• The West was the fastest-growing region, with its population climbing by 1.5 percent. The South followed (1.4 percent), with the Midwest third (0.4 percent) and the Northeast fourth (0.1 percent). 
• The South now accounts for 36 percent of the nation's total population, with the West comprising 23 percent, the Midwest 22 percent and the Northeast 18 percent. 
• The population estimate for Puerto Rico for July 1, 2006, was 3.9 million, up about 16,000 since July 1, 2005. Puerto Rico's rate of increase was 0.4 percent. 

Leading 10 States/Equivalents by Population Changes: 
July 1, 2005 to July 1, 2006 

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Is a Reverse Mortgage Right for You?

The number of federally insured reverse mortgages jumped 77% to 76,351 from 43,131 in fiscal 2006, according to the National Reverse Mortgage Lenders Association (NRMLA). With a reverse mortgage, homeowners age 62 and older can borrow against their home equity, and the loan isn't repaid until the homeowner moves or dies. 

While reverse mortgages sound good, you may not be able to borrow as much as you think. To figure out how much you can borrow based on your age, your home's value and prevailing interest rates, go to the reverse mortgage calculator on the NRMLA Web site -- http://www.reversemortgage.org/

Now factor in the costs. The homeowner may pay a fee of up to 8% of the value of their homes. Of that, 2% goes to government to insure the mortgage, 1% to 2% goes to the lender and the rest pays for closing costs. If it's likely you'll need to sell the home in the near term due to financial hardship or illness, a reverse mortgage may not be worth the cost. Instead, consider downsizing to a less expensive home to free up your equity. 

For more information about reverse mortgages, click here.  
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