AARP Public Policy Institute Examines How to Make Your Nest Egg Last a Lifetime

As increasing numbers of Americans consider retirement, many are not only worried about saving enough, but how to make their savings last throughout retirement. Today, AARP releases two documents examining and challenging the rules of thumb when it comes to planning for retirement.

Today’s retirees face a market downturn, falling home values and diminishing retirement savings which forces many to answer tough questions like: When should I claim Social Security? Should I get an annuity? What should I do with my home or mortgage? The rules of thumb no longer apply.

“When most individuals think of retirement, they think about how to save enough money,” said Jean Setzfand, AARP Director of Financial Security. “We have not spent nearly enough time discussing the best ways to take that money and turn it into an income stream that lasts throughout retirement. Our tip sheet challenges conventional thinking and offers general guidance about how to make the best decision for you and your circumstances.”

The AARP tip sheet, “Money Matters: Spending Down Your Assets in Retirement” (link below) addresses key questions like the ones above regarding planning for retirement and walks individuals through key actions steps – including resources and general guidance depending on an individual’s situation.

“Conventional wisdom may not be right for everyone,” said Janet McCubbin, who heads economic research at AARP’s Public Policy Institute. “More and more retirees today have to manage their own assets—instead of just cashing a pension check—and that’s not easy. A look at what experts have discovered can serve as a practical guide.”

AARP today released a second report, “Making Your Nest Egg Last a Lifetime,” that takes a fresh look at common financial decisions in retirement planning. The report was written for AARP by Anthony Webb of the Center for Retirement Research at BostonCollege.

To find the Money Matters tip sheet visit http://assets.aarp.org/www.aarp.org_/articles/money/financial_pdfs/spend_down_retirement_2009.pdf

WASHINGTON—AARP Executive Vice President John Rother released this statement in response to today’s report by the Department of Health and Human Services, “America’s Seniors and Health Insurance Reform: Protecting Coverage and Strengthening Medicare.”

“Older Americans are keenly aware of the high cost and inefficiencies of our current health care system.  As today’s report notes, a couple today needs to save $300,000 just to cover their health care bills in retirement.

“Too often, people age 50 to 64 find themselves unable to purchase affordable insurance because of a preexisting condition, or simply because of their age, making them the fastest growing group of uninsured Americans.  And each year, millions of people in Medicare fall into the doughnut hole—a costly gap in their prescription drug coverage—or struggle to find a doctor willing to take new Medicare patients.

“Health care proposals pending in Congress would guarantee every American has a choice of affordable, dependable health coverage, close the Medicare doughnut hole, pay doctors in Medicare fairly and take major steps to combat the skyrocketing costs of health care.

“We look forward to working with the Administration in the coming weeks to create a health care system that strengthens Medicare, protects patients and makes insurance fair for everyone.”

AARP is a nonprofit, nonpartisan membership organization that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole.  AARP does not endorse candidates for public office or make contributions to either political campaigns or candidates.  We produce AARP The Magazine, the definitive voice for 50+ Americans and the world's largest-circulation magazine with over 35.5 million readers; AARP Bulletin, the go-to news source for AARP's 40 million members and Americans 50+; AARP Segunda Juventud, the only bilingual U.S. publication dedicated exclusively to the 50+ Hispanic community; and our website, AARP.org.  AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors.  We have staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.

By RICARDO ALONSO-ZALDIVAR, Associated Press Writer

WASHINGTON (AP) -- Former Republican vice presidential candidate Sarah Palin says the health care overhaul bill would set up a "death panel." Federal bureaucrats would play God, ruling on whether ailing seniors are worth enough to society to deserve life-sustaining medical care. Palin and other critics are wrong.

Nothing in the legislation would carry out such a bleak vision. The provision that has caused the uproar would instead authorize Medicare to pay doctors for counseling patients about end-of-life care, if the patient wishes. Here are some questions and answers on the controversy:

Q: Does the health care legislation bill promote "mercy killing," or euthanasia?

A: No.

Q: Then what's all the fuss about?

A: A provision in the House bill written by Rep. Earl Blumenauer, D-Ore., would allow Medicare to pay doctors for voluntary counseling sessions that address end-of-life issues. The conversations between doctor and patient would include living wills, making a close relative or a trusted friend your health care proxy, learning about hospice as an option for the terminally ill, and information about pain medications for people suffering chronic discomfort.

The sessions would be covered every five years, more frequently if someone is gravely ill.

Q: Is anything required?

Monsignor Charles Fahey, 76, a Catholic priest who is chairman of the board of the National Council on Aging, a nonprofit service and advocacy group, says no.

"We have to make decisions that are deliberative about our health care at every moment," Fahey said. "What I have said is that if I cannot say another prayer, if I cannot give or get another hug, and if I cannot have another martini - then let me go."

Q: Does the bill advocate assisted suicide?

A: No. It would block funds for counseling that presents suicide or assisted suicide as an option.

Q: Who supports the provision?

A: The American Medical Association, the National Hospice and Palliative Care Organization and Consumers Union are among the groups supporting the provision. AARP, the seniors' lobby, is taking out print advertisements this week that label as false the claim that the legislation will empower the government to take over life-and-death decisions from individuals.

Q: Should the federal government be getting involved with living wills and end-of-life questions - decisions that are highly personal and really difficult?

A: It already is.

The government requires hospitals to ask adult patients if they have a living will, or "advance directive." If the patient doesn't have one, and wants one, the hospital has to provide assistance. The mandate on hospitals was instituted during a Republican administration, in 1992, under President George H.W. Bush.

Q: How does a living will work, and how is it different from a health care proxy?

A: A living will - also called an advance directive - spells out a patient's wishes if he or she becomes incapacitated. Often people say they don't want to be kept alive on breathing machines if their condition is terminal and irreversible.

A health care proxy empowers another person to make medical decisions should the patient become incapacitated.

There's also a power-of-attorney, which authorizes another person to make financial decisions for someone who is incapacitated.

Such legal documents have become standard estate-planning tools in the last twenty years.

Q: Would the health overhaul legislation change the way people now deal with making end-of-life decisions?

A: It very well could.

Supporters of the provision say the main consequence would be to formally bring doctors into a discussion that now takes place mainly among family members and lawyers.

"When you execute a legal document with your lawyer, it ends up in your files and in the lawyer's files," said John Rother, a senior policy and strategy adviser for AARP. "Unless the doctor is part of this discussion, it's unlikely that your wishes will be respected. The doctor will be the one involved in any decisions."

The American Medical Association says involving doctors is simple common sense.

"There has been a lot of misinformation about the advance care planning provisions in the bill," AMA President Dr. James Rohack said in a statement. "It's plain, old-fashioned medical care."

Q: So why are some people upset?

Some social conservatives say stronger language is needed to protect seniors from being pressured into signing away their rights to medical treatment in a moment of depression or despair.

The National Right to Life Committee opposes the provision as written.

"I'm not aware of 'death panels' in the bill," said David O'Steen, executive director of the group. "I'm not aware of anything that says you will be hauled before a government bureaucrat. But we are concerned ... it doesn't take a lot to push a vulnerable person - perhaps unwittingly - to give up their right to life-sustaining treatment."

• August 19 – 12NOON - 2:30PM at the Portland Senior Center, 7 Waverly Place, Portland, CT;
• August 28 – 12NOON – 2:30PM at the Enfield Senior Center, 299 Main Street, Enfield, CT;
• September 1 – 12NOON – 2:30PM, New Milford Senior Center, 40 Main Street, New Milford, CT
• September 2 – 12NOON – 2:30PM at the North Branch Library, 3455 Madison Avenue, Bridgeport, CT; and
• September 3 – 9:45AM – 11:30AM at the Wallingford Senior Center, 238 Washington Street, Wallingford, CT. 

Lunch will be provided at each of the meetings.  Advance registration is required.

Association fighting proposals that would unfairly burden people in Medicare

WASHINGTON—AARP CEO Barry Rand today wrote to House Energy and Commerce Committee Chairman Henry Waxman, urging Congress to find ways to pay for comprehensive health care reforms beyond the Medicare savings already announced that will improve the program’s efficiency.  In a letter to Chairman Waxman, Rand applauded the committee’s reported compromise agreement for “hold[ing] the line on additional Medicare savings.”  Rand emphasized that AARP members would not support legislation that finances reform through higher out-of-pocket costs or reduced benefits for people in Medicare.

“AARP cannot support any efforts to target Medicare beneficiaries for increased cost-sharing or other benefit cuts,” Rand wrote.  “In addition, we cannot support backdoor attempts to finance health care reform through increases in beneficiary costs or reductions in benefits, for example, through use of commissions or other process mechanisms.”

Rand noted that people in Medicare today already spend, on average, nearly 30 percent of their income on out-of-pocket health care costs, restating the Association’s fight against proposals that would unfairly burden people in Medicare.

Rand added: “We know you share the position, expressed by the President in his July 22 press conference—and reiterated this week in AARP’s own tele-town hall—that health reform will not result in less generous Medicare benefits.”

AARP has reassured its members that proposals it has reviewed so far to save money in Medicare will not raise their out-of-pocket costs or reduce access to care.  AARP has urged Congress to find smart Medicare savings, such as reducing payments to private insurers in Medicare, lowering drug costs and preventing avoidable hospital readmissions.

In the letter, Rand applauded the Energy and Commerce Committee’s compromise agreement, which reportedly retains many of the key priorities of AARP’s members, including closing the Part D doughnut hole, strictly limiting age-rating and creating subsidies to help more Americans purchase their choice of coverage.

“We are pleased the House bill retains a stricter 2 to 1 limit on how much more insurers can charge older Americans for premiums,” Rand wrote.  “In addition, we are pleased that the House Energy and Commerce bill still provides sliding-scale subsidies up to 400 percent of the federal poverty level.  These subsidies are essential to making certain our members can afford coverage and not pay an unfair percentage of their incomes for health care expenses.”

For a complete copy of Rand’s letter to Chairman Waxman, please contact AARP Media Relations at the number above.

For more information about AARP’s Health Action Now campaign, please visit www.healthactionnow.org.

AARP is a nonprofit, nonpartisan membership organization that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole.  AARP does not endorse candidates for public office or make contributions to either political campaigns or candidates.  We produce AARP The Magazine, the definitive voice for 50+ Americans and the world's largest-circulation magazine with over 35.5 million readers; AARP Bulletin, the go-to news source for AARP's 40 million members and Americans 50+; AARP Segunda Juventud, the only bilingual U.S. publication dedicated exclusively to the 50+ Hispanic community; and our website, AARP.org.  AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors.  We have staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.