A Boston College study says out-of-pocket health care costs will total more than half a future retiree’s Social Security income by 2040.
By Jeremy Smerd Comments 0 | Recommend 0
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.
Jeremy Smerd is a Workforce Management staff writer based in New York. E-mail editors@workforce.com to comment.
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