#millennials #Medicare #RetirementSavings #HealthCareSpending
Millennials may be a long way from Medicare eligibility.
But they need to care about it now, lest it runs out of money, or pays fewer benefits, when their time comes.
“Previous years’ surpluses, stowed away in a trust fund, will cover the (funding) gap until 2029. After that, Medicare Part A will be able to cover 88 percent of promised benefits, rather than 100 percent,” writes Liz Weston, a personal finance columnist for NerdWallet.com. Her column was published March 3, 2018, in The Atlanta Journal-Constitution.
Weston also writes that the younger folks need to figure out ways to cut health care spending in general.
Let’s break down the situation. First, as Weston writes, some in Washington are itching to cut Medicare, which provides relatively affordable health insurance to the 65-and-older demographic. Depending on what happens in Washington, health care costs could go up for millennials as they age. “Without a sturdy Medicare system, health care for older Americans could quickly become unaffordable,” Weston writes.
Also, young people in the private insurance market – those who do not have decent insurance benefits from their employers – should think about buying individual insurance policies now. Sure, you think you are young and won’t get sick or injured, but what if you do? Plus, they are relatively affordable for young, healthy folks. Also, having a health insurance policy young may make it easier for you to get health insurance when you are older.
Young folks tend to spend less time thinking about eventualities when they get older, so they tend to spend more and save less. The earlier in life you start saving, the more comfortable you’ll be when you get older. Also, retirement won’t necessarily come when you want it to. Companies reorganize frequently, and jobs you think are indispensable today could be gone tomorrow.
“Millennials already have enough burdens. They earn less, have a lot less wealth and owe a lot more in student loan debt than previous generations did at their age,” Weston writes.
So what’s a young person to do? First, have a bona fide, regular savings plan. Even if you can only put, say, $5 a week into it at the beginning, do that religiously. As your income increases, add more. Any raises you get should go into that fund, so, as your income increases, you can learn to economize on living expenses. Whatever you do, don’t touch that money until many years down the road.
Easier said than done? Perhaps. So you have to make a point of doing it, perhaps sacrificing some immediate pleasures to ensure you are keeping your promise to yourself.
As your savings increase – when your fund builds to a point that keeping it in a bank account seems unprofitable – find a trusted investment adviser who can guide you through the different investment vehicles for each stage of your life. Unless you are a financial professional, trying to manage your own investments can be risky. Obviously, some risk is warranted, but good, objective advice on the type of risk for your situation is essential.
Then, think about how you use your time. Are the things you spend your non-work time on enriching you? If not, there are many vehicles out there that, with a small investment of time consistently, can make you money. To check out one of the best, message me.
Young folks need to worry about Medicare, if they want it available to them when they reach that stage of life. So, pay attention to what happens in Washington. But, also, set up your own life so that no matter what happens, you’ll have the best life you can get when you reach your parents’ or grandparents’ ages.
Peter