Caution: Retirement bankruptcy up ahead

[El Pinko]

http://www.seacoastonline.com/apps/pbcs.dll/article?AID=/20080220/BIZ/802200366&sfad=1

Caution: Retirement bankruptcy up ahead
Study: Health care costs to blame for decreased savings

February 20, 2008 6:00 AM
COLUMBUS, Ohio — A dramatic increase in the number of working Americans who likely won't be financially prepared to retire is largely due to the escalating cost of health care, according to the most recent findings by the Center for Retirement Research at Boston College.

The National Retirement Risk Index, released Tuesday by the CRR, shows that 61 percent of today's workers will be at risk for not being financially prepared to retire. The 17-point increase from the previous Index number of 44 percent — released in July 2007 — demonstrates how the surging cost of health care is having a significant effect on retirement savings.

"Boston College's findings add another arrow to the quiver of pessimism — but not hopelessness — regarding the retirement savings and spending habits of Americans, especially as health care costs escalate and company and government-sponsored retirement plans trail off," said Paul Ballew, senior vice president of customer insights and analytics for Nationwide.

"Additional research continues to provide substantial evidence that most consumers are less prepared today for their retirement years compared to five, 10 or 20 years ago," Ballew said. "For example, medical expenses have increased 43 percent in the last five years and will likely increase at a higher rate compared to overall consumer spending. And, health care now accounts for more than 20 percent of all personal spending, double what it was in 1970."

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