Our aging population, money and sharing
By Dian Vujovich
I recently asked a retired CEO friend of mine what he thought life in America is all about these days. He said, “It’s all about the money.” And he’s right. Money, however, isn’t as plentiful for most as it is for a few. Nothing new there. But given America’s changing demographics, that could spell trouble in the not-so-distant future.
The Baby Boomer population is said to be growing by 10,000 individuals a day. That’s a number not to be dismissed. In fact, there are currently 62.83 million Americans age 60 around today, according to the Census Bureau. Compare that with the number of people under the age of 15— 61.09 million— and you’ve got a first: It’s the first time those over age 60 have exceeded those under age 15 in U.S. history.
That matters on a number of different fronts. The most vital is how to pay for our own personal aging life.
In a recent blog, I wrote my down-and-dirty formula for calculating how much money one will need to retire. It’s simple multiplication: Take the amount of money it costs you to live each year and multiply it by the number of years you think you’ll live.
I know that formula is likely to make financial advisors cringe and all sorts of professionals say that life during one’s retirement years isn’t as expensive as those in pre-retirement years but to that I say, “Hogwash.”
While retirees might not need things like an expensive wardrobe or the high-end footware they once did (walking in platform Jimmy Choo shoes isn’t nearly as likely at 67 as it was at 45), what trumps looking good is the high cost of health and nursing home care.
According to Fidelity Investments, a couple 65 years of age and on Medicare will need an average of $220,000 for medical expenses during their retirement. Throw in the cost of nursing-home care— pros say averages over $50,000 a year, a figure I consider low— and those who think the retiring years aren’t expensive simply aren’t thinking.
Whether you’re a bajillionaire or not, living a long life in today’s America is more expensive than it’s ever been. Prepare for it. And once you’ve accomplished that goal for you and yours, consider helping others.
With a disjointed personal and corporate tax system, a way too huge financial gap between the wealthy and the working poor, a smaller work force and tens of thousands of people with little saved for retirement, the future of a thriving America will depend upon our ability to do one thing: Share.
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