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Planning for Retirement and End-of-Life Care


People who are capable of identifying with their future selves were more likely to save for the long term, which is necessary when we consider the fact that out-of-pocket medical expenses in the last year of life average around $11,000 per older person, with 10 percent of older people spending more than $29,000 in that year. This article discusses the importance and impact of planning for retirement and end-of-life care, and how it affects the well-being of older people, their caregivers, and their families.

Key Points

The data presented in this article was collected through the National Institute on Aging-supported Health and Retirement Study (HRS) that surveys a representative sample of Americans age 51 or older every two years. It is organized into several parts, including planning and saving for retirement, improving retirement planning and financial security, planning and decision making for end-of-life care, and improving end-of-life planning. The overall premise is that the plans individuals make for retirement and end-of-life care not only influence their well being and financial security as they age, but may also protect them from unwanted treatments.

Other article highlights include:

  1. Retirement planning and savings decisions have grown more complex, with employers frequently moving way from defined benefit pension plans to retirement savings plans that require individuals to make complex long-term investment decisions.
  2. Estimates of older Americans prepared for retirement vary based on age, but one analysis of the economic resources of Americans 66-69 found that 20 percent of married people and more than half of single people were unprepared. Additionally, it was concluded that nearly one-third of workers age 50+ had not considered their retirement.
  3. Financial literacy is linked to planning and higher savings levels, but only half of respondents could answer two simple questions regarding interest rates and inflation.
  4. More than one in four elderly Americans are incapacitated at the end of their lives and unable to make their own medical care decisions, according to the study that examined the deaths of 3,700 HRS participants between 2000 and 2006. Those with a living will or durable power of attorney for health care (two-thirds of the total) were less likely to die in a hospital or to receive aggressive care, results that were consistent with their wishes.

How to Use

There are a variety of approaches mentioned in this article to help improve individual’s level of information about financial concepts and increase motivation to plan, which in turn could encourage planning and saving for retirement, including workplace education and workplace processes. Local officials can encourage organizations to offer informational seminars, or can consider organizing seminars in their community to help residents understand the importance of saving and planning, and what steps to take. Similarly, there are a number of ways to improve the effectiveness of end-of-life planning identified in the article, including educational approaches and public information campaigns. It was determined that information regarding end-of-life planning needs to be received multiple times, therefore local officials can play an important role in making sure this happens through providing educational opportunities and encouraging targeted campaigns in their community.

View full report: Planning for Retirement and End-of-Life Care (PDF – 137 KB)

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