Baby Boomers are celebrating their 65th birthdays at a rate of 8-10-thousand each day. And many aren’t prepared for health care expenses. HPR’s Wayne Yoshioka reports.
Recent studies estimate an average couple retiring at 65 years of age can expect to pay anywhere from 280-to-400 thousand dollars in healthcare expenses throughout their retirement. David Kimura is an investment manager.
“A lot of people come to us when their parents start to need more care. That’s kind of like the big trigger, because they realize how much the cost is and how much time that they have to spend with their parents, taking time off from work, and so, they realize they need to start planning and looking at other options to either pay for their care or pay somebody else to help care for them when they get older.”
Kimura says saving for retirement is the best way to prepare for health care costs in later years. He says most 65-year-olds are eligible for Medicare Part A for hospital care. But, Part B for doctor visits and Part D, for medications, cost extra. Medicare also doesn’t cover vision and dental. According to AARP, saving for retirement is not easy for at least half of the workforce in the private sector. Hawai’i State Director, Barbara Kim Stanton.
“Two-hundred-sixteen-thousand workers currently do not have an easy way to save at work. You know, 84 percent of those surveyed said that they are in support of the state doing something to help people save at work. And that’s why something like the Hawai’i Saves Bill that we tried to push through last year is so vital. We have to get it passed in 2019.”
The Hawai’i Saves Bill would enable workers to have payroll savings deductions without having their employers pay for the service, which is costly and complicated. AARP’s Stanton says this would be a win all the way around.
“If you have enough people saving, as little as one-thousand dollars more per year for the lower income residents, we’re talking about $37-million in savings over the next 15 years for the cost of Medicaid, costs of safety net programs and rental assistance, etcetera.”
Many financial advisors recommend workers save six times their annual salary for retirement. Investment manager Kimura says the earlier you start, the better.
“We try and counsel our people – you know – they need to save for themselves. People in Hawai’i have a tendency to help out their kids or their families but nobody’s gonna be around to help pay for all their retirement expenses and you need to save. Don’t get into too much debt. Your kids can get their own wealth, eventually. So, pay yourself first.”
For HPR News, I’m Wayne Yoshioka.