Aging & Financial Health in 2020
…BY THE NUMBERS
An interesting piece by Paul Brandus outlines a number of changes that will affect the finances of older adults and retirees in the coming new year. One will affect 401(k)s and IRAs. For instance, the contribution limit for a designated Roth 401(k) for 2020 is $19,500—up from $19,000 in 2019. Individuals who are 50 plus can make catch-up contributions to their 401(k) accounts and/or individual retirement accounts up to $6,500, for a potential total annual contribution of $25,500. The average Social Security payment will be up slightly in 2020, and the average ‘retirement’ age will increase by two months. The most disturbing figure in the Brandus article concerns planning for medical expenses in later life. According to the piece, Fidelity Investments examines this data annually and estimates out-of-pocket medical expenses for the average couple retiring at age 65 in 2019 at $285,000. For single retirees, the health care cost is estimated at $150,000 for women and $135,000 for men. You can be sure these figures will rise another few percentage points in 2020. According to Fidelity, a 65-year old couple retiring in 2019 can expect to spend $285,000 in health care and medical expenses throughout retirement, compared with $280,000 in 2018. For single retirees, the health care the health care cost estimate is $150,000 for women and $135,000 for men. Given recent research from the Federal Reserve concluding that nearly half of Americans don’t have $400 in cash for an emergency, as well as research from AARP suggesting that when seniors are exploited, they lose an average of $120,000 to fraudsters, older Americans should certainly be concerned about protecting their financial health.