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Across the country, demographics and cultures are evolving. As the baby boomer generation continues to age, the way states set their budgets and health care policies must adapt. The focus will be on the needs of people under 50 with changing attitudes towards working past age 65. Retirement does not necessarily mean a senior is leaving the workforce.
Reason Seniors May Continue Working
Many US adults plan to continue working in retirement. Some will work out of necessity to earn more money because of increased longevity, health care costs, and reduced Social Security payouts, while others will leave their career and strike out in a different direction, often pursuing a lifelong dream or spending time and energy in volunteer work or philanthropy. Whatever the senior individual’s pursuit, it is clear that new patterns have emerged in the past 10 years, which has a profound budgetary effect on individual US states.
Seniors Prefer to Age in Place
Baby boomers want to age in place and are committed to staying vital, fit, and independent for as long as possible. They want to die in their own homes, not in a hospital or long-term care facility. An AARP survey of 2,826 US adults found that about 75% of people over 50 want to stay in their homes or communities for as long as possible. There are many ways to accomplish this goal, but it requires some planning to ensure you have the financial resources to pay for the quality of care and lifestyle you prefer. An elder law attorney can point you in the right direction and work with your financial advisor for a holistic approach.
The Impact on State Health Care Budgets
So why does this demographic and economic shift put a strain on so many state budgets? The answer is twofold; there is an increase in health care burdens while tax revenues decline since Americans tend to pay fewer taxes as they get older. This is due partially to senior retirement but also because seniors tend to spend less money than younger generations. This means more health services are needed, and fewer tax dollars are available to fund the programs.
Even the states that are best rated for aging (ranked by overall health), senior unemployment, life expectancy, and nursing home quality, are challenged because of health care costs. Rising healthcare costs have been taking a large portion of each state’s government budget and will most likely continue to do so.
Health care costs are also hitting baby boomers hard. There is a trend in people aged 50 to 65 having more incidence of disability, obesity, and diabetes, increasing their need for medical care and services. The average 65-year-old couple retiring in 2022 needs $315,000 to cover health care costs alone over the remainder of their lives. That is a 5% increase from the previous year, and with no substantive health care pricing reform on the policy horizon, that amount will continue to increase.
Have an Elder Law Attorney Speak with Your Financial Advisor
Now is the time to work with a legal and financial professional to work on a personal retirement plan that considers your future care needs. Our estate planning and elder law firm is dedicated to informing you of issues affecting seniors who may be experiencing declining health. Our elder law attorneys help you and your loved ones prepare for potential long-term medical expenses and the need to transition to in-home, assisted living, and nursing home care.