Future Cost of Retiring Unaffordable

Stay Fit: The young will need to keep working and should try to stay healthy, because if recent research by the Center for Retirement Research at Boston College is any indicator, it’s unlikely that they will be able to afford the costs of post-retirement health care. Declining Social Security benefits have long meant that workers must invest more in 401(k) plans. But exacerbating the problem of planning for retirement are rising health care costs, especially out-of-pocket costs for Medicare, according to research by the center. In order to keep the entitlement programs solvent, workers will likely face an 18.5 percent increase in payroll taxes, beginning no later than 2040, according to center research. In addition, future retirees will face higher out-of-pocket costs for health care. By 2040, out-of-pocket costs for Medicare will equal 53 percent of a person’s income from Social Security benefits, the research states.