Chapter 9 Notes
Chapter 9 Notes FAD3343
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This 3 page Class Notes was uploaded by Irene Mansour on Tuesday March 29, 2016. The Class Notes belongs to FAD3343 at 1 MDSS-SGSLM-Langley AFB Advanced Education in General Dentistry 12 Months taught by Dr. jeter in Winter 2016. Since its upload, it has received 27 views. For similar materials see CONTEXTS OF ADULT DEVELOPMENT in Child and Family Studies at 1 MDSS-SGSLM-Langley AFB Advanced Education in General Dentistry 12 Months.
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Date Created: 03/29/16
Chapter 9: FINANCES & LIFESTYLE - Financial Status o The financial status of the average older American is not much different than the average income for all adult households. o Older adults today (boomer generation): o Racially diverse o Better educated o More likely to be divorced o Women are more likely to have worked full-time & qualify for SS o May need long-term care because of longevity o May exhaust financial resources because of longevity - Diversity in Financial Status o The spread of wealth is great among older adults. o The disadvantaged (poorly educated, women, & minorities) have not shared equally in the increase of retirement income that has happened since 1974. o Upper income brackets also have private pensions & asset income. o There’s a myth that many elderly are “well-to-do”; the reality is that many are struggling in the lower-to-middle class income ranges. - Home Ownership o A majority of older adults own their home. o However, there’s a high cost of maintaining the home that older adults may struggle with. o The greatest asset for most elders is the value of their home o Reverse Mortgage: a loan is made against the home equity owned by a borrower. When the home is sold, the lender receives the portion of the money borrowed, plus interest. Only beneficial for those who choose to “age in place” o Mobile homes are often an affordable option for older adults, although a lot rent can be expensive & uncontrolled. - Social Security o SS began in 1935 to counter effects of Great Depression o Developed to prevent poverty in more vulnerable older aged Nearly 50% of aged would live in poverty w/out SS. o Designed as supplement to pension/retirement savings, rather than to provide total income About 40% of older aged’s income is from SS In 2004, 1/3 of Americans 65+: SS was 90% of their income o Fewer younger workers are paying into SS per older adult. The baby boom generation retiring will make this gap larger. o Remember, SS paid now is supporting older-aged individuals now o SS benefits rise w/ cost of living, known as cost-of-living adjustment (COLA) o There are practices in effect to try to protect SS Increasing SS tax rate Raising eligibility rate for full benefits Increasing tax rates for self-employed Decrease in starting benefits for early retirees - Assuring Social Security o By 2037, it is project that SS will be bankrupt if changes aren’t made Raise taxes to pay for SS benefits Increase number of years people must work before receiving payments Reduce benefits to higher income individuals (has a drawback, though) Private SS into a mandatory “get what you save” program - Medical Expenses o Medicare & Medicaid do not cover all medical expenses when one is over 65 years of age. The following expenses are not covered: Dental care & dentures Over the counter drugs & most prescriptions Eyeglasses & eye exams/Hearing aids & hearing exams Routine foot care Most immunization shots Custodial care in home & custodial long term care (nursing homes) - Medicare o Those eligible for SS benefits are eligible for Medicare Requires deductibles & 20% copays Part A: Medicare hospital insurance Part B: Supplementary medical insurance ($95/mon) o Older adults can have Medicaid (if they meet the financial criteria), Medigap (private insurance), or private pay for additional medication expenses. o Medical expenses & long-term can be financially devastating to the elderly - Private Pensions: o Money received upon retirement from funds into which an individual usually has paid while working IRAs & 401(k): amount invested is proportionate to the benefits. Contributed by employee & employer o Pension Drawbacks: Part-time or temporary employees often not eligible Have to work certain # of years to be eligible (not good if you change jobs often)