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What financial risks do retirees face in late life?
What financial risks do retirees face in late life?
- Collection:
- Health Policy and Services Research
- Series Title(s):
- Issue in brief (Center for Retirement Research)
- Author(s):
- Rutledge, Matthew S., author
Sanzenbacher, Geoffrey T., author - Contributor(s):
- Boston College. Center for Retirement Research, issuing body.
- Publication:
- Chestnut Hill, MA : Center for Retirement Research at Boston College, January 2019
- Language(s):
- English
- Format:
- Text
- Subject(s):
- Financing, Personal
Retirement
United States - Genre(s):
- Technical Report
- Abstract:
- Rising life expectancy means that many more Americans will reach very old ages. While longer lives are undeniably positive, they also mean that more people will face late-life financial risks for which they may be unprepared. These late-life risks include high out-of-pocket medical expenses; an increased possibility of financial mistakes due to declining cognitive abilities; and the specter of widowhood. The situation is generally expected to become more challenging, because future retirees will be more reliant on often-modest 401(k)/IRA lump sums rather than the automatic lifelong payment stream of a traditional pension plan. At the same time, a rising Full Retirement Age means monthly Social Security checks will provide less relative to pre-retirement income at any given claiming age. In short, future retirees will likely have less reliable income as they reach advanced ages. This brief reviews research by the U.S. Social Security Administration's Retirement Research Consortium and others on the nature and extent of late-life financial risks. The brief is organized as follows. The first section explains how demographic and economic changes are leading to a larger population susceptible to these risks. The second section explores the nature of the three risks outlined above. The final section concludes that out-of-pocket medical expenses, financial mistakes, and widowhood tend to severely impact the finances of only a minority of older Americans today, but that those threats may be more widespread in the future.
- Copyright:
- Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY license. (More information)
- Extent:
- 1 online resource (1 PDF file (7 pages))
- Illustrations:
- Illustrations
- NLM Unique ID:
- 101751877 (See catalog record)
- Permanent Link:
- http://resource.nlm.nih.gov/101751877