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The National Summit on Retirement
Savings was established as part of the Savings Are Vital to Everyone's
Retirement Act (SAVER) of 1997 to examine the state of retirement
savings and explore ways to educate Americans about the need
to create a secure financial future. The event is the first of
three, with additional summits scheduled for 2001 and 2005.
While the Summit has examined
a number of challenges facing America's retirees, perhaps the
largest challenge set before them today is the lack of planning
for the costs associated with aging. Imagine a typical American family. The parents
have worked all their lives and managed to set some savings aside
for retirement to enjoy their golden years. Yet, in the midst
of that perceived financial security, tragedy strikes. A loved
one is stricken with a debilitating illness and requires the
kind of medical attention that only a long term care facility
can provide. With the average annual cost of a nursing home over
$41,000, and the average stay in such a facility at 2.3 years,
a lifetime of savings could be wiped out in a matter of months. |
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Few Americans today are taking
adequate steps to prepare financially for the long term health
care needs they may face in the future. The 1998 Retirement Confidence Survey (RCS) found
that 44 percent of Americans saving for retirement are very confident
that they are investing their resources wisely. However, a 1995
Gallup Poll revealed that 76 percent of Americans believe they
will never need a nursing home, home-based care or any other
long term care service. But the fact is that two out of every
five Americans will need long term care at some point in their
lives, and millions will be financially unprepared to meet the
costs of such care.
Social Security provides the
primary source of income today for more than two-thirds of all
retired Americans. Clearly,
Social Security and Medicare are two essential national support
systems for our nation's elderly. The third is long term care
and, contrary to popular belief, Medicare does not provide long
term care services for the nation's elderly. Rather, Medicaid,
a federal-state welfare program, is the primary provider of nursing
home care for more than two-thirds of our nation's residents.
The future of American retirees'
financial well-being depends upon their ability to educate themselves
on the very real likelihood that they will need long term health
care. The American Health
Care Association agrees with the core tenets of the Retirement
Summit: Individuals must begin planning for retirement now and
take full advantage of the numerous opportunities to overcome
the barriers to properly saving. Any sound financial foundation,
however, must include plans to meet a loved one's growing health
care needs. |
