Monthly Archives for December 2024

Retirees reflect on financial fragility of retirement

Published in RINewsToday on December 9, 2024

Literally just hot off the press… the Los Angeles, California-based nonprofit Transamerica Center for Retirement Studies® (TCRS) in collaboration with Transamerica Institute®, released the findings of its 24 Annual Transamerica Retirement survey.  Considered to be one of the largest and longest running annual surveys of its kind, its findings paint a picture of being retired in America.

Retiree life in the post-pandemic economy examines the health and well-being, personal finances, and retirement security of U.S. retirees no longer working. The report’s analysis was prepared by the research team at Transamerica Institute and TCRS. The 25-minute online survey was conducted within the U.S. by The Harris Poll on behalf of Transamerica Institute between September 14 and October 23, 2023, among a nationally representative sample of 10,002 people, including a subsample of 2,404 retirees who are retired and do not work.

Shedding light on the many facets of retirement

According to TCRS’s retirement survey, released on Nov. 26th, fewer than one in four retirees (23%) say they are very confident and able to maintain a comfortable lifestyle throughout their retirement.

“Retirement brings freedom and time for personal pursuits,” said Catherine Collinson, CEO and president of Transamerica Institute and TCRS in a statement announcing the release of the 76-page report. “However, retirees are living on a fixed income with limited financial resources. Many would be unable to withstand a major financial shock, such as the need to pay for long-term care. Retirees’ fragile financial situation serves as a cautionary tale that underscores the imperative for strengthening our retirement system,” she says.

“Many retirees may wonder what they could have done differently to save and plan for retirement, and many may feel they have done everything right but still came up short,” adds Collinson. “In reality, over their working careers, the world has changed, the retirement landscape has evolved, and the need to self-fund a greater portion of one’s retirement income has intensified,” she said.  

Based on the report’s findings, retirees are active and engaged in meaningful ways. As retirees, they are:

·         spending more time with family and friends (58%)

·         pursuing hobbies (43%)

·         traveling (36%)

·         taking care of their grandchildren (19%)

·         doing volunteer work (16%)

·         caregiving (10%)

Although most retirees express a positive feeling about life, others say they are distressed.  Most retirees say they are:

·         generally happy (89%)

·         have close relationships with family and friends (88%)

·         enjoying life (86%)

·         have a positive view of aging (79%)

·         have a strong sense of purpose (79%)

·         have an active social life (53%)

However, three in 10 retirees (30%) have financial trouble in making ends meet, 27% indicate they often feel unmotivated and overwhelmed, 24% often feel anxious and depressed, and 17% are isolated and lonely.

Retirees who retired before the age of 65 are cutting short their working years and income, a situation that could inevitably lead to a decrease in their retirement income. Almost six in 10 retirees say they retired sooner than planned (58%) and, among them, almost half did so for personal health-related reasons (46%) and employment-related issues (43%), while 20% did so for family-related reasons. Only one in five (21%) retired early because they were financially able.

Retirees are struggling to juggle competing financial priorities and debt, the findings indicate. Retirees’ say their current top financial priorities include

·         building emergency savings (31%)

·         just getting by to cover basic living expenses (29%)

·         continuing to save for retirement (24%)

·         paying off one or more forms of debt as a current financial priority (45%)

o    paying off credit cards (30%), paying off mortgages (20%), paying off other consumer debt (10%), and paying off student loans (3%).

The survey found that the retiree’s greatest retirement fears centered around money and health issues.  Forty-two percent expressed fear that Social Security will be reduced or may cease to exist in the future.  Almost six in 10 retirees (58%) expect Social Security to be their primary source of income throughout their retirement, reinforcing their view that the retirement program is the cornerstone of their retirement income.

Retiring before age 65 impacts your Social Security benefit. Retirees currently receiving Social Security started at age 63 (median) which translates to a lower monthly benefit than if they had waited until their full retirement age of 66 or 67, depending on the year they were born. Only 4% of retirees waited until age 70 or later which would have maximized their monthly benefit, noted the report.

Additionally, the retirees fear declining health that requires long-term care (37%), losing their independence (32%), outliving their savings and investments (32%), and cognitive decline, dementia, or Alzheimer’s (28%).

Fear of unanticipated costly long-term care

Only 13% of retirees are very confident they would be able to afford long-term care, if needed – and only 13% have long-term care insurance, noted the findings. When asked if their health declines and they need help with daily activities and/or nursing care, almost half of retirees (48%) say they plan to rely on family members and friends to provide such care. Moreover, relatively few retirees have codified their wishes in legal documents such as powers of attorney and advance directives.

Annual Income

The survey respondents had an annual household income of $55,000 (estimated median) as of late 2023 with more than one-third of retirees (36%) having an income of less than $50,000. Retirees’ household savings excluding home equity were $71,000 (estimated median) in 2023.

Untapped opportunities might be helpful to retirees in strengthening their finances.The researchers say that retirees need to be fully engaged in financial planning or taking steps that could improve their overall situation. Only 24% indicate they have “a lot” of working knowledge about personal finance, 19% have a financial strategy for retirement in the form of a written plan, and just 7% frequently discuss saving, investing, and retirement planning with family and close friends. Only one in three (33%) use a professional financial advisor.

“Many retirees may wonder what they could have done differently to save and plan for retirement, and many may feel they have done everything right but still came up short,” said Collinson. “In reality, over their working careers, the world has changed, the retirement landscape has evolved, and the need to self-fund a greater portion of one’s retirement income has intensified.”

Thoughts about Retirement in the Ocean State    

“I can confidently say there’s less road ahead to retirement than there is behind me,” quips Kemal Saatcioglu, Ph.D., associate professor and chair of the Economics and Finance Department at Rhode Island College (RIC). “Going through this report was an eye opener even for me and I came away with a mix of inspiration, awareness, and a sense of urgency,” he says.

“Asnoted in this report, the retirees’ ability to find purpose, freedom, and joy, even amid challenges shows the resiliency and flexibility we all possess, notes the RIC Professor.  “Knowing that many retirees successfully navigate these waters is inspiring and is a motivator for getting into retirement planning with confidence,” he adds.

According to Saatcioglu, the report is a wake-up call for retirees. The data clearly indicates that they, in general, can be better prepared.  “The statistics about limited savings, reliance on Social Security, and the lack of written financial plans might push those of us nearing retirement to re-evaluate our financial readiness. The survey data will likely create motivation to consult a financial advisor to ensure better use of available resources,” he says. 

Saatcioglu calls the points about life expectancy and the length of retirement striking. “While it may be daunting at first to consider how 15 to 20 years could stretch retirement savings, prioritizing strategies for sustainability, such as long-term care insurance or budgeting for healthcare costs are great steps to take,” he says, especially the importance of mental health and stress management also encourages a more holistic view of our overall well-being.

Retirees must recognize local challenges and strengths. “Granted Rhode Island is not the most retirement friendly state. Higher costs of living, especially on housing, utilities, and food, and less than a friendly tax environment are challenges but knowing about them ahead of time and taking steps early on can mitigate those challenges,” recommends Saatcioglu.

Finally, Saatcioglu believes that the survey creates a motivation to take action—whether it’s updating financial plans, discussing retirement goals with family, or exploring community resources. Retirement can be an exciting, and rather long, stage of life, as long as proactive steps are taken now.

Maureen Maigret, Policy Advisor for the Senior Agenda Coalition, notes that the findings of the Transamerica report align with what older Rhode Islanders are concerned with in terms of their economic security, especially the  cost of healthcare and housing, worries about being able to afford any needed long-term services and a lack of planning to meet those need.  “Adding to those worries is uncertainty about possible proposed changes from a new federal administration for two of the most valuable programs for older adults – Social Security and Medicare,” she says.

According to Maigret, the Senior Agenda Coalition of RI (SACRI) has advocated to enhance the economic security of older Rhode Islanders.  She stated that a recent SACRI survey found the costs for health care and housing were priority issues for the state’s older population.  “That’s why we will continue to work in 2025 to expand the Medicare Savings Program to increase its income eligibility so lower-income older adults and persons on Medicare will be able to get their Medicare Part B premium covered and in some cases co-payments,” she says, also stressing the importance of ensurng that the housing bond funds are targeted toward developing more affordable housing options for older adults.  

“I deeply appreciate the insights in this report. It highlights the importance of proactive retirement planning and the emotional and financial complexities retirees face in the post-pandemic economy,” says Josh Wells, CEO of The Retirement Factory, who stresses the importance of balancing the emotional and financial aspects of retirement.

According to Wells, retirees often feel the weight of navigating Social Security decisions or managing healthcare costs. This report underscores that many retirees are unsure about these critical choices, with only 7% frequently discussing retirement planning with family or friends and just 33% using a financial advisor. ”It’s a powerful reminder that education and open dialogue are key to achieving retirement confidence,” he says.

“Rhode Island retirees exemplify resilience and adaptability in the face of change,” says Wells.  “The report highlights that 70% of retirees feel confident about maintaining a comfortable lifestyle, even amidst financial and health challenges. For Ocean State retirees, this confidence is bolstered by state-specific benefits such as the ability to exclude up to $20,000 of retirement income from state taxes for those at full retirement age and meeting income thresholds, as well as property tax relief of up to $600 for eligible seniors with limited incomes,” he says, noting that these program reflect “the state’s commitment to supporting its senior population, enabling retirees to plan carefully, stay connected to their communities, and enjoy a fulfilling retirement.”

Like the report’s findings, RI retirees are juggling competing financial priorities, especially with only a minimal 2024 increase in their ERSRI pension, says Sandra Paquette, representing the Advocates for Cost of Living Adjustment (COLA) Restoration and Pension Reform. Of equal, often ignored significance, these retirees have been deprived of 13 years of potential savings,” she says.

“By unjustly removing a COLA, the former teachers, state workers and some municipal employees  have been plunged into survival mode, where limited, fixed incomes are barely sufficient to cover necessities and essentials. In many instances, choices must be made among prescriptions, heating and food– by individuals who spent a lifetime of service, and of contributing  to their retirement benefits,” adds Paquette.

For a copy of Transamerica Center for Retirement Studies’ new report, go to https://www.transamericainstitute.org/research/publications/details/retiree-life-in-the-post-pandemic-economy-2024.

Bipartisan efforts strengthens the Dementia public health infrastructure

Published in RINewsToday on December 2, 2024

In the waning days of the Biden administration, Congress has moved one step closer to assisting states to continue to effectively implement dementia interventions.  Following passage of H. R. 7218 on Sept. 17th, by voice vote on Nov. 21st, the U.S. Senate passed S. 3775, also without objection. At press time, the bipartisan legislation now heads to President Biden’s desk to be signed into law.

Once signed, the new law re-authorizes the Building Our Largest Dementia (BOLD) Infrastructure for Alzheimer’s Act (P.L.115-406) enacted in 2018, empowering public health departments across the country to implement effective dementia interventions in their communities.

In a March 2024 fact sheet, the Alzheimer’s Impact Movement (AIM) calls for Alzheimer’s and other dementias to be considered an urgent public health issue, noting that nearly 7 million seniors across the nation are currently living with Alzheimer’s.

While partisan bickering has reduced the number of bills passed during the 118th Congress, Democratic and Republican lawmakers seek solutions for containing the skyrocketing costs of care, finding a cure for debilitating brain disorders, and supporting caregivers. 

The nation spends more than $360 billion per year, including $231 billion in costs to Medicare and Medicaid. Barring any major breakthroughs to prevent, slow down, or cure Alzheimer’s, the number of Americans with Alzheimer’s is expected to double by 2060, costing the nation more than $1.1 trillion per year, says AIM’s Fact Sheet.

Congress continues funding of Dementia effective interventions

In the Senate, S. 3775 was spearheaded by Sens. Susan Collins (R-ME) Catherine Cortez Masto (D-NV), Tim Kaine (D-VA), and Shelley Moore Capito (R-WV), and cosponsored by Sens. Jack Reed and Sheldon Whitehouse.  It’s companion measure, H.R. 7218, was introduced in the House by Reps. Brett Guthrie (R-KY), Chairman of the Health Subcommittee of the House Energy & Commerce Committee, along with Chris Smith (R-NJ), Paul Tonko (D-NY), and Maxine Waters (D-CA).

With its enactment in 2018, P.L. 115-406 accelerated a multi-pronged public health approach to reduce risk, detect early symptoms, advance care, improve data, and ultimately change the trajectory of this devastating disease.

Headed by the Centers for Disease and Prevention (CDC), the reauthorization would authorize $33 million per year, in line with current appropriations, over the next five years to support:

1.  Alzheimer’s Disease and Related Dementias Public Health Centers of Excellence dedicated to promoting effective Alzheimer’s disease and caregiving interventions, as well as educating the public on Alzheimer’s disease, cognitive decline, and brain health. 

2.  Public Health Cooperative Agreements with the CDC that are awarded to State Health Departments to help them meet local needs in promoting brain health, reducing risk of cognitive decline, improving care for those with Alzheimer’s, and other key public health activities. 

3.  Data Grants to improve the analysis and timely reporting of data on Alzheimer’s, cognitive decline, caregiving, and health disparities at the state and national levels.

Since the original Bold Infrastructure for Alzheimer’s Act passed, the CDC has made 66 awards to 45 state, local and tribal public health departments to help them implement effective dementia interventions such as reducing risk, increasing early detection and diagnosis, and supporting the needs of caregivers.

“Alzheimer’s disease is one of the greatest and most under-recognized public health threats of our time. Nearly seven million Americans—including 29,600 Mainers—are living with the disease, and that number is soaring as our overall population grows older and lives longer,” said Maine Sen. Collins, a founder and Senate co-chair of the Congressional Task Force on Alzheimer’s Disease in a statement announcing the passage of the legislation.  

“The passage of this bipartisan legislation is a tremendous victory for families and communities nationwide. By reauthorizing the BOLD Infrastructure for Alzheimer’s Act, we are reaffirming our commitments to providing the tools needed to fight this devastating disease, and to not let Alzheimer’s be one of the defining diseases of our children’s generation as it has ours,” says Collins.

“Since the original BOLD Infrastructure for Alzheimer’s Act passed, public health departments have been able to improve brain health across the life course in their communities,” said Robert Egge, Alzheimer’s Association chief public policy officer and AIM president. “The BOLD Reauthorization Act will help public health departments implement effective strategies that promote brain health, address dementia, and support individuals living with dementia and their caregivers,” said Egge. “We urge the President to support the Alzheimer’s community and swiftly sign this bipartisan bill into law,” he says.

Rhode Island response

“Getting this bill across the finish line is a win for the 25,000 Rhode Islanders living with Alzheimer’s, their adult children who work tirelessly as unpaid family caregivers, and for the health and economic needs of the next generation too.  We must continue the progress we’ve made against Alzheimer’s.  We’ve got to find better treatments for Alzheimer’s and related dementias. The federal government must do its part to reduce risk, detect early symptoms, and advance care while lifting the burden on unpaid caregivers,” said RI Sen. Reed.

Since the original BOLD Infrastructure for Alzheimer’s Act passed in 2018, Reed noted that the Rhode Island Department of Health (RIDOH) has been awarded $3.8 million in BOLD Infrastructure for Alzheimer’s Act grants from the CDC. RIDOH has used the federal BOLD grant funds to help to implement effective Alzheimer’s interventions, including boosting early detection and diagnosis, reducing risk, and preventing avoidable hospitalizations, he says.

Victoria O’Connor, program manager at the RIDOH’s Alzheimer’s Disease and Related Disorders (ADRD), who chairs the state’s Advisory Council on ADRD, agrees with Sen. Reed’s assessment about the positive impact of this federal grant on state-wide public health interventions for those caring for persons with dementia.

“The RIDOH Alzheimer’s Disease and Related Disorders Program leads a statewide Advisory Council, convening critical partners, subject matter experts, and people with lived experience to advise implementation of the BOLD funded workplan as well as oversee the Rhode Island State Plan on Alzheimer’s Disease and Related Disorders 2024-2029. This collaborative approach has led to successful implementation of public health interventions statewide that aim to empower all individuals impacted by dementia to achieve their best quality of life.” says O’Connor.

Other congressional actions to combat Alzheimer’s  

Earlier this year, Sen. Reed helped pass the National Alzheimer’s Project Act (NAPA) Reauthorization Act and the Alzheimer’s Accountability and Investment Act (AAIA).  Sen. Whitehouse was also a cosponsor of the National Alzheimer’s Project Act (NAPA) Reauthorization Act.  Both bills were signed into law by President Biden. 

The NAPA Reauthorization Act (P.L.,118-93) reauthorizes NAPA through 2035, considered a roadmap to coordinate federal efforts in responding to Alzheimer’s and other forms of dementia.  Since NAPA was first passed in 2011, Alzheimer’s research funding has increased seven-fold.  Today, funding for research into Alzheimer’s and other dementias totals over $3.8 billion.

The Alzheimer’s Accountability and Investment Act (P.L. 118-93) would require the Director of the National Institutes of Health (NIH) to submit an annual budget to Congress estimating the funding necessary to fully implement NAPA’s research goals.  This will help ensure Congress can make a well-informed decision to determine necessary Alzheimer’s research funding levels.

We have made tremendous progress in recent years to boost funding for Alzheimer’s research, which holds great promise to end this disease that has had a devastating effect on millions of Americans and their families,” said Sen. Collins, who authored NAPA and AAIA.

“These two bills will maintain our momentum and make sure that we do not take our foot off the pedal just as our investments in basic research are beginning to translate into potential new treatments. We must not let Alzheimer’s to be one of the defining diseases of our children’s generation as it has ours,” she says.

And as a member of the Appropriations subcommittee that oversees funding for the National Institutes of Health (NIH), Sen. Reed helped provide a $275 million increase for Alzheimer’s disease research in the fiscal year 2025 Senate Labor, Health and Human Services, Education, and related Agencies Appropriations bill.  In 2019, NIH awarded Brown University researchers, along with Boston-based Hebrew SeniorLife (HSL), over $53 million in federal research funds  to lead a nationwide effort to improve health care and quality of life for people living with Alzheimer’s disease and related dementias, as well as their caregivers.