Tag Archives for inflation

Prudential Financial study: Gen Xers stumbling into retirement

Published in RINewsToday on July 10, 2023

While aging baby boomers ease into retirement, a new research study finds that Generation X, born between 1965 and 1979, are now facing the harsh reality of not being financially prepared for their looming retirement.

This demographic cohort group follows the baby boomers (1946 to 1964) and proceeds the millennials (1980 to 1994).

America’s 65 million Generation Xers are confronted with a new set of financial challenges that are redefining their plans to ease into retirement, just as they enter their final working years, according to Prudential Financial, Inc.’s latest Pulse research survey, “Gen X: Retirement Revised.”

According to the study’s findings, more than one third (35%) of the Gen Xers have less than $10,000 in retirement savings, and 18% have nothing saved. This cohort group has missed out on “Great Wealth Transfer,” from boomers to millennials.  And 46% say that they won’t have enough savings to live comfortably in their twilight years. This generation will be forced to work much longer and will forgo “snowbird lifestyles.”

“Gen X faces one of the most complex landscapes for retirement readiness in decades, including the decline of defined benefit pension plans which supported prior generations’ retirement, as well as significant uncertainty about the economy and long-term Social Security benefits,” said Prudential Vice Chair Rob Falzon, in a statement announcing the survey results released on June 7, 2023. “This data underscores how important it is for Gen X to adopt a new set of retirement strategies designed to protect and grow their savings, and when possible, translate their assets into reliable sources of future income.” he said.

Cracked-Egg Nest

Researchers found that almost 46% (up to 30 million) Generation Xers do not think they’ll have an adequate nest egg to live comfortably in their retirement years. This fear is reinforced by the reality of their accumulated retirement savings. 

The study findings indicate that most Gen Xers are considering delaying their retirement. While 19% of Gen Xers plan to fully retire, 82% say they plan to work part-time or are unsure they will be able to fully retire.  

As to home ownership, Gen Xers “won’t bet the house, say the researchers.” Only 16% of Gen X plan to use their home value to help fund retirement. Most of Gen X are not planning to follow in the footsteps of baby boomers, who are tapping into record home equity and currently make up the highest share of buyers and sellers nationwide,” say the researchers citing National Association of REALTORS report.  

As winters approach, don’t expect Gen Xers to go South, either. Approximately two-thirds (65%) of Gen X plan to stay in one city or town in retirement. Only 15% plan to split time between locations, note the study’s findings.

Gen Xers don’t expect inheritances (the transferring of wealth from one generation to another) to give them a financial cushion they hope for during their retirement. The study found that a measly 12% say an inheritance will be a source of retirement income, even as boomers are expected to pass down over $70 trillion (total wealth figure according to Federal Reserve data). What’s more, 84% of Gen Xers are not planning to leave an inheritance. Only 16% say they are factoring a family inheritance to fund their own retirement.

Gen Xers must face retirement obstacles

The Prudential Financial, Inc.’s latest Pulse research survey also identified additional retirement obstacles that Gen Xers must confront. The findings indicate that this generation is facing complicated problems not seen in the generations that proceeded them. At the same time, the researchers say, Gen Xers are not currently following a retirement strategy, saving enough for their later years, or accounting for long-term expenses and situations.

Gen Xers closely watch the partisan bickering over how to fix an ailing Social Security program. Despite projections that Social Security trust fund reserves could be depleted by 2033 (reported by the Trustees of the Social Security and Medicare Trust Funds report), 58% of Gen Xers say that can’t expect to rely on it as a source of their retirement income. Among those who plan on receiving Social Security, 54% are worried about the program’s funds being depleted.

As to pensions, the study found that only 20% of Gen Xers plan to use pensions as a source of their retirement income, and only 11% will mostly rely on a pension. This reflects the known steep decline in the number of pension plans, which fell by 73% between 1985 and 2020 (Department of Labor data).

While 33% of Gen Xers say they have a retirement strategy, 67% do not. Almost half (48%) are saving, but don’t have a plan as to how to accumulate the savings.

With inflation slowing down, the study found that more than two-thirds (68%) of working Gen Xers are concerned about reaching their savings goals due to inflation, and nearly three-quarters (72%) of all Gen Xers say the current environment makes it hard to plan beyond day-to-day living.

The study found that Gen Xers worry about job insecurity. While an economic downturn still ranks as the biggest threat to this generation’s job security among working Gen Xers (35%), expressed fears of being replaced by younger workers (29%), and less expensive (26%) workers, are close behind.

Finally, the researchers say that Gen Xers are not accurately factoring in critical costs that they may face during retirement. Nearly two-fifths (38%) are not factoring in healthcare costs, and three-quarters (75%) are not accounting for assisted living expenses.

While the average retiree is expected to receive an average monthly Social Security benefit, it was noted that the average monthly cost of retirement expenses in the U.S is $ 4,350 (Bureau of Labor Statistics). The average retirement living gap is $2,520.

“Gen Xers are contemplating significantly different approaches than prior generations to achieve retirement security,” said Dylan Tyson, president, Prudential Retirement Strategies in response to the release of this retirement study. “Together, we must find ways to incorporate the fundamental best practices of traditional pensions into today’s defined contribution–based retirement system. Strategies like protected accumulation and protected income planning are required to help Gen Xers avoid the potential hazards of longevity risk and market volatility on otherwise well-balanced financial plans,” he said.

The Prudential Pulse Survey on Gen X retirement was conducted from March 31 to April 6, 2023. Using a national sample of 2,000 Gen X adults, ages 43 to 48 and not yet retired. Interviews were  conducted online, and quotas were set to reflect a nationally representative population sample based on age, gender/ethnicity, educational attainment, and region. 

Inflation less of an issue for seniors in Assisted Living

Published in RINewsToday o December 5, 2022

A report released TODAY by PayingforSeniorCare.com finds that inflation of goods and services has severely impacted seniors, but inflation of senior living is much softer by comparison. 

The two-part report shares findings based on a survey of 1,000 U.S. adults aged 55+, and data showing the best and worst states for senior living inflation in the United States. Researchers say that this aims to both highlight seniors’ inflation concerns, and provide informational resources for those who need financial assistance.

According to the survey findings, 4 in 10 seniors worry that they won’t be able to afford food and groceries in the future due to inflation, and 1 in 5 say that inflation has caused their grocery bill to increase by more than $250 per month. Overall, 1 in 4 seniors say that they’ve had to make drastic changes to their lifestyle to cope with inflation. For example, more than 1 in 10 seniors say they’ve had to skip meals or by delaying needed medical procedures to save money.

However, researchers say that inflation for senior living is not as extreme. According to data from Caring.com, the nation’s leading senior living referral services, senior living in the U.S. has not experienced the inflation that other sectors of the economy have. Average assisted living costs have only increased 3.7 percent since 2019, while the Consumer Price Index (CPI), a measure of consumer goods and services, has risen by 15.6 percent during the same time period.

“Some may find it surprising to know that since 2019, average inflation for the cost of senior living in the U.S. is less than 1/4th the cost of general inflation (3.7% vs. 15.6%). Many don’t also realize that many of the essential expenses rising in cost — food, energy, gas — are included in the rate of a senior living community,” says Han Hwang, Caring.com’s EVP of Partnerships. 

“While inflation remains a serious concern for seniors and the population in general, relatively low occupancy rates in senior living communities driven by COVID-19 has largely kept inflation at bay,” notes Hwang, “However, we are hearing from operators that rates will continue to increase over time – those prices just haven’t caught up yet with inflation in general,” he says. 

Hwang adds: “For those not yet living in senior living, the report’s insights on the alarmingly high number of seniors skipping meals, medicines and medical procedures due to inflationary pressures should be concerning to everyone. These are essentials for seniors’ well-being, and shouldn’t be skipped. We hope this report will help direct seniors and their families to support resources as soon as possible.

This report finds that not all states have enjoyed the same low inflation of senior living. Several, including North Dakota and Hawaii, have inflation rates of over 20% since 2019 – significantly outpacing the 15.6% inflation rate of the CPI.

Over age 65 seniors comprise 17.7% of Rhode Island’s population. This percentage is expected to grow to 25% by 2030. From the Paying for Senior Care report: Rhode Island is ranked 7th in this study for states with lowest inflation rates for senior living. Rhode Island is among the states that saw a decrease in the average cost of assisted living since 2019, averaging $108 less per month and $1,301 annually in rent and care costs for assisted living. 

This report is made up of two parts: an online survey conducted in October of 2022 of 1,000 U.S. seniors, and data and analysis based on the cost of senior living between 2019 and 2022 according to data provided by Caring.com.

For those who need specific help and guidance on coping with the cost of inflation,  PayingForSeniorCare.com offers a free service – Senior Care Experts who can guide seniors or their loved ones through the decision making process, and provide personalized advice based on their budget and care needs. This service is available by calling (855) 481-6777.

For a copy of this report, go to www.payingforseniorcare.com/2022-inflation-and-seniors-impact-report.Herb Weiss, LRI’12, a Pawtucket writer covering aging, health care and medical issues. To purchase his books, Taking Charge: Collected Stories on Aging Boldly, and a sequel, go to herbweiss.com. 

World issues pushed nursing home reform to the side in State of the Union. But it’s there

Published on March 7, 2022 in Rhode Island News Today

More than a week ago, President Joe Biden, with Vice President Kamala Harris and House Speaker Nancy Pelosi, sitting behind him in the House Chamber in the United States Capitol, delivered his first State of the Union Address. Harris and Pelosi made history marking the first time two women have been on the dais during a presidential address before the joint session and the American people

According to C-SPAN, Biden’s speech was the fourth-longest of the seven most recent presidents’ speeches, beating out Presidents George H.W. Bush, George H. Bush and Ronald Reagan. Amid frequent applause breaks, chanting from both sides of the aisle and heckling, Biden’s prepared remarks delivered Tuesday, March 1, 2022, totaled around 7,762 words, lasting over one hour and two minutes.

Biden spoke mostly on-script with his prepared remarks on a wide range of topics before lawmakers, Supreme Court Justices, guests, many waving small blue and yellow Ukraine flags or wearing the country’s colors to show solidarity with the people of Ukraine. While the first half touched on the Russian invasion of Ukraine and the need for a global coalition to respond, the second half addressed inflation, COVID-19 and the “new normal,” increasing domestic manufacturing, health care, prescription drugs, energy and taxes, voting rights legislation, and the nomination of Judge Ketanji Brown Jackson to the Supreme Court. 

Biden concluded his speech by proposing a “Unity agenda” calling for a fight against the opioid epidemic, pushing Congress to pass a mental health package, supporting Veterans returning from the battlegrounds of Iraq and Afghanistan and finding a cure for cancer.

The State of the Union and nursing homes

While Biden’s speech briefly touched on the quality of care in the nation’s nursing homes, his Administration is clearly making this a major domestic issue.  During the address, Biden expressed strong concerns about Wall Street firms that were taking over many nations’ nursing homes. “Quality in those homes has gone down and costs have gone up. That ends on my watch,” he told the packed chamber. “Medicare is going to set higher standards for nursing homes and make sure your loved ones get the care they deserve and expect and [they’ll be] looked at closely,” he said.

A day before the State of the Union address, the White house released a detailed document, entitled, “Fact Sheet: Protecting Seniors and People with Disabilities by Improving Safety and Quality of Care in the Nation’s Nursing Homes,” outlining dozens of proposed changes on how U.S. nursing homes are regulated and operate, including a vow to adopt federal minimum staffing requirements for facilities, step up enforcement of regulations and to eliminate overcrowded patient rooms.

Amid the ongoing COVID-19 pandemic that continues to wreak havoc on the nation’s nursing homes, where 200,000 residents and workers have died from COVID-19, nearly a quarter of all COVID-19 deaths in the United States, the Biden Administration says that staffing shortages are getting worse, reducing the quality of care provided to residents

Poorly performing facilities will be held accountable for improper and unsafe care and must immediately improve their services or will be cut off from tax payor dollars. Biden calls for better information to be provided to the public to assist them in better understanding the conditions they will find in each facility and to assist them in choosing the best care options available.  

Centers for Medicare & Medicaid Services (CMS) will begin to explore ways to reduce resident room crowding in nursing homes by phasing out rooms with three or more residents and promoting private, single occupancy rooms. Multi-occupancy rooms increase the risk of the spread of infectious diseases, including COVID-19.  The agency will also establish a minimum nursing home staffing requirement, the adequacy of staffing is closely linked to quality of care provided.

Meanwhile, CMS also plans to strengthen the Medicare Skilled Nursing Facility Value-Based Purchasing Program and base payment on staffing adequacy (including over weekends) and retention and the resident experience.  Although the nation has seen a dramatic decrease in the use of antipsychotic drugs in nursing homes in recent years, CMS will continue its efforts to identify problematic diagnoses and bring down “inappropriate use” of such drugs.

Enhancing accountability and oversight

The Biden Administration calls for the enhancing and accountability and oversight of the nation’s nursing homes by adequately funding inspection activities, beefing up scrutiny on more of the poorest facility performers, expanding financial penalties and other enforcement sanctions, and increasing the accountability for chain owners whose facilities provide substandard care. CMS will work with nursing homes to improve care by providing technical assistance.

To enhance transparency, CMS will create a new database that will track and identify owners and operators across states to highlight previous problems with promoting resident health and safety.  The agency will also collect and publicly report data on corporate nursing home ownership and will enhance the Nursing Home Care website. Finally, CMS will examine the role that private equity investors play in the nursing home sector.

Biden’s nursing home reforms will ensure that every nursing home has a sufficient number of adequately trained staff to provide care to the 1.4 million residents residing in over 15,500 Medicare and Medicaid facilities across the nation.  Nursing home staff turnover can be reduced by creating pathways to good-paying jobs along with ensuring staff to join a union.  CMS calls for lowering financial barriers to Nurse Assistant Training, adequate compensation and access to a realistic career ladder. The agency launches a National Nursing Career Pathways Campaign with partners including the Department of Labor.

Finally, Biden puts together his strategy to ensure emergency preparedness in nursing homes during the ongoing pandemic.  He calls for continued COVID-19 testing in nursing homes and continued COVID-19 vaccinations and boosters to be provided to residents and staff. CMS will strengthen requirements for on-site infection prevention, and make changes to its emergency preparedness requirements,   Finally, the agency will take what it has learned during the pandemic and integrate new lessons on standards of care into nursing home requirements around fire safety, infection control, and other areas, using an equity lens.

Point/Counter Point

In a released statement after Biden’s State of the Union address, AARP CEO Jo Ann Jenkins stated: “We were also encouraged to hear the President describe new actions to ensure that residents in nursing homes will receive the safe, high-quality care they deserve. For years, AARP and AARP Foundation have sounded the alarm about problems in America’s nursing homes. The COVID-19 pandemic exposed the chronic, ongoing issues with our long-term care system and emphasized the need for reform. It is a national disgrace that more than 200,000 residents and staff in nursing homes and other long-term care facilities died. AARP urges the federal government to act swiftly to ensure minimum staffing standards, increase transparency, and hold nursing homes accountable when they do not provide quality care.”

On the other hand, the nursing home industry had its views as to Biden’s call for nursing home reforms.  “The nursing home profession has always been committed to improving the quality of care our residents receive, and we appreciate the Biden Administration joining us in this ongoing effort. Over the last decade and prior to the pandemic, the sector made dramatic improvements. Fewer people were returning to the hospital, staff were providing more one-on-one care than ever before, and the unnecessary use of antipsychotic medications significantly declined,” said Mark Parkinson president and CEO of AHCA, in a released statement.

“Those who continue to criticize the nursing home sector are the same people who refuse to prioritize our residents and staff for resources that will help save and improve lives,” noted Parkinson, whose Washington, DC-based nonprofit organization represents more than 14,000 nursing homes and long-term care facilities across the nation. “Additional oversight without corresponding assistance will not improve resident care. To make real improvements, we need policymakers to prioritize investing in this chronically underfunded health care sector and support providers’ improvement on the metrics that matter for residents,” he said.

“It’s time to stop blaming nursing homes for a once-in-a-century pandemic that uniquely targeted our residents and vilifying the heroic caregivers who did everything they could to protect the residents they have come to know as family,” said Parkinson. ““Long term care was already dealing with a workforce shortage prior to COVID, and the pandemic exacerbated the crisis. We would love to hire more nurses and nurse aides to support the increasing needs of our residents. However, we cannot meet additional staffing requirements when we can’t find people to fill the open positions nor when we don’t have the resources to compete against other employers,” he said.  

To read the White House Fact Sheet to improving the quality of care in the nation’s nursing homes, go to:

https://www.whitehouse.gov/briefing-room/statements-releases/2022/02/28/fact-sheet-protecting-seniors-and-people-with-disabilities-by-improving-safety-and-quality-of-care-in-the-nations-nursing-homes/

On Monday, March 7th at 9am, AARP Rhode Island and US Senators Reed and Whitehouse will speak on the need for lower prescription drug prices in a virtual press conference.

AARP Rhode Island State Director Catherine Taylor, Volunteer State President Marcus Mitchell and Volunteer Lead Federal Liaison Dr. Phil Zarlengo will join Rhode Island US Senators Jack Reed and Sheldon Whitehouse for a virtual news conference highlighting the need for Congress to lower prescription drug prices. AARP Rhode Island will present the Senators with a petition signed by more than16,000 Rhode Islanders calling for Congress to act now and stop unfair drug prices.

You can listen in via ZOOM at:  

https://aarp-org.zoom.us/j/98668832992?pwd=bktuTjJBMUZhUDRaVDkvN2dCSXZqUT09

Passcode: 618357

Participants will respond to on-topic media questions posted in chat.

More information about AARP’s Fair Drug Prices campaign can be found at aarp.org/rx.