IRI: Social Security and Medicare Facing Long-Term Challenges
WASHINGTON, D.C. – The Insured Retirement Institute (IRI) issued the following statement from IRI President and CEO Cathy Weatherford in response to reports released today by the trustees of the Social Security and Medicare programs.
According to this year’s Social Security Trustees Report, the combined Social Security retirement and disability trust funds are projected to be exhausted in 2033, unchanged from last year. Meanwhile the Medicare trustees project that the Hospital Insurance Trust Fund will be able to cover its obligations until 2030, four years later than projected in 2013.
“Retirement uncertainty continues to soar. The latest research from IRI shows that the percentage of Baby Boomers who are confident in their retirement expectations has dropped each year since we started tracking their attitudes – from 44 percent in 2011 to 35 percent today. With Social Security and Medicare forming the base of almost every American’s retirement plan, this year’s reports – despite the modest improvements in Medicare’s finances – will not be a boost to lagging retirement confidence measures. In fact, as long as both programs continue to face long-term financial challenges, we expect that their financial condition will have a negative impact on retirement confidence in America. With both programs requiring reforms to ensure their long-term viability and with these changes having the potential to reduce cumulative benefits, Americans are encouraged to discuss alternative options with a financial professional to ensure that they can maintain their financial security throughout retirement and have more confidence as they approach their later years.”
For additional research findings from IRI’s 2014 Baby Boomer study, follow this link.
Key findings from the report:
- A quarter of Boomers postponed their plans to retire during the past year.
- 28 percent of Boomers plan to retire at age 70 or later.
- One in 10 Boomers prematurely withdrew savings from a retirement plan during the past year.
- 80 percent of Boomers have retirement savings.
- About one-half of Boomers with retirement savings have $250,000 or more saved for retirement.
- 55 percent of Boomers have calculated a retirement savings goal, up from 50 percent in 2013.
- Of those calculating a retirement savings goal, 76 percent are factoring in the cost of health care.
- Three in four Boomers say tax deferral is an important feature of a retirement investment.
- Nearly 40 percent of Boomers would be less likely to save for retirement if tax incentives for retirement savings, such as tax deferral, were reduced or eliminated.
- Boomers planning for retirement with the help of a financial advisor are more than twice as likely to be highly confident in their retirement plans compared to those planning for retirement on their own.
The IRI study is based on a survey of 800 Americans aged 51 to 67. The report was released during a conference call with reporters to open National Retirement Planning Week® 2014. The annual campaign promotes and encourages comprehensive retirement planning.
About the Insured Retirement Institute: The Insured Retirement Institute (IRI) is the leading association for the retirement income industry. IRI proudly leads a national consumer coalition of more than 30 organizations, and is the only association that represents the entire supply chain of insured retirement strategies. IRI members are the major insurers, asset managers, broker-dealers/distributors, and 150,000 financial professionals. As a not-for-profit organization, IRI provides an objective forum for communication and education, and advocates for the sustainable retirement solutions Americans need to help achieve a secure and dignified retirement. Learn more at www.irionline.org.