The Downside of Living Longer
Posted by hyperpat on September 14, 2006
As part of the process of getting my new mortgage approved, I had to go through all of our various retirement type accounts, which for us amounts to four different 401K’s, three different pension plans, savings bonds and certificates of deposit. When I totaled everything up, the sum looked fairly impressive. But when I look at it another way, it’s not so much, less than two years worth of our current combined salary. Will it be enough to really make our retirement financially worry-free?
Now there’s still some time that we have before retirement, and I expect that in that time our total savings will almost triple from current levels if we can continue to save as we have been. And if (that’s a big if) Social Security is still around and paying what they say they will, it looks like there will be enough, barring any major illnesses or Congress deciding to dismantle the SS program. But that’s the worry – I can’t predict the future, but I can point to high probabilities.
The first of these is that the likelihood of major medical problems for us is quite high. My wife is a Type II diabetic, which at the moment has not caused her any major problems, but this ailment is known for catching up to you in many nasty ways, including glaucoma, kidney problems, high blood pressure, circulation problems, and neurological disorders. Treatment for these ‘side effects’ can be extensive and expensive. I have Crohn’s disease and COPD, both long term, essentially incurable problems. Either of these, if they get out of control, would make it impossible for me to work. And Medicare (Parts A, B, C, D, and by then probably part Z) will not cover all of the medical costs I can see coming.
The second high probability is that Congress will do something with Social Security. The program as it stands is financially unsound. Raising SS taxes even more to fund projected shortfalls doesn’t look like it’s in the cards, which leaves some form of benefit reduction as the most likely path for reform.
So I fiddle with the numbers, and look to see if we can set even a bit more aside each month. But I’m afraid I’ll have to live with this nagging worry about retirement. Still, we are far better off than many people, who have little or no savings. Which is still another worry. If there are too many people who don’t have enough to live comfortably at retirement time, who have to be supported by additional aid from the government in the form of housing and food subsidies, this will leave even less wiggle-room in the government budget for Social Security and Medicare. It’s something of a nasty spiral, and it at least partially springs from something that everyone wants, the ability to live longer thanks to the improvements in medical care in the last century.