More and more over-55s are finding that retirement just doesn’t work for them.
Especially financially.
So if it seems as though there are more commuters with a, let’s say, tasteful touch of gray at the temples on your 7:15 to Penn Station, it may not be your imagination.
Many are trying to hold on to jobs well past the time when they had planned to start enjoying the golden years, because they didn’t want to lose health insurance.
Take Tish Brandt, a manager with Manhattan’s Rennert language school, who says she will continue in the work force until she qualifies for Medicare at age 65 — “and maybe then some.” The Texas transplant says, “Health insurance has been the bane of my existence.” A former manager for Macy’s, she has switched jobs several times because an employer couldn’t offer her coverage.
“I am grateful to my [current] employer for [health insurance],” she says, although she expects her contributions to the plan will be going up. Brandt’s middle-class income doesn’t qualify her for Medicaid, so she lives in fear of not having health-insurance coverage. “I could break my leg, or one thing could happen, and I would be in trouble,” she worries.
But wait. Wasn’t ObamaCare supposed to relieve exactly those concerns? Not entirely, according to a recently released study by the Society of Actuaries, which found that ObamaCare will raise insurance-company claims costs by 32 percent. Increased premiums are almost certain to follow — and they will likely hit self-insured individuals (as opposed to those insured by employers) the hardest.
In that harsh light, the 9-to-5 grind doesn’t look quite so, well, grinding.
A closer look at Friday’s unemployment figures from the Bureau of Labor Statistics shows just how widespread the phenomenon has become.
The BLS reported that the seasonally adjusted labor force of those 55 and older totaled 31.2 million, a rise of a little more than a million from just a year earlier.
And the unemployment rate for such senior workers is more than 2 points lower than the overall US unemployment rate of 7.6 percent.
In fact, the increase in labor force participation rates of all older age groups, even among those 75 and over, has been rising dramatically over the last two decades — more than doubling among that very 75-plus group.
“Overall, over one-half of workers [53 percent] reported that they plan to work longer than they would like in order to continue receiving health insurance through work,” a report by the nonpartisan Employee Benefit Research Institute revealed.
The survey also found that 70 percent of pre-retirees said having health insurance was either extremely important or very important in retirement planning.
As a percentage of a person’s total spending, health-care expenses increase over the last years of a person’s life. EBRI says that typically, a 50-year-old will spend 9 percent of his or her total income on health care. At age 85, that number doubles to 18 percent.
EBRI estimated that an average 65-year-old couple, with median drug expenses, would need $163,000 set aside in 2012 to have a 50 percent chance of having enough money to cover health-care expenses for the rest of their lives.
And that doesn’t include long-term care, such as nursing-home expenses. With $283,000 set aside, the EBRI added, the couple would have a 90 percent chance of meeting health-care costs in retirement. (These are exclusively health-care costs and don’t include other retirement expenses.)
Among pre-retirees, health care is the name of the game. And while ObamaCare promises to be literally a game-changer, it looks like older Americans will need to know a lot more about the rules — and costs — before they trust it.