SEPTEMBER 18, 1995 VOLUME 3, NUMBER 12
Although most people believe that today’s generation of elderly Americans is relatively wealthy, a recent survey suggests that the perception is misplaced. Data released by the Rand Corporation, an independent California research group, shows that many of the elderly have retired into financial insecurity. Furthermore, the study reveals that those scheduled to retire in the next ten years are equally at risk.
More startling even than the information about the entire elderly population is the disparity the study found between minority and non-minority seniors. While the median white household in the 51-60 age group had $18,000 in personal savings (not including the family home), the comparable black and Hispanic family asset level was less than $500.
_For every dollar of wealth held by white middle-aged households, black households were found to have only 27 cents, and Hispanic households about 30 cents. While the top 5% of white retirees claim $650,000 or more in assets, forty percent of black and Hispanic middle-aged families have no savings at all.
For both most minority households and the typical white household, Social Security remains the largest single source of wealth. Furthermore, the study concludes, the current benefit levels of the Social Security program, combined with other social benefit programs, discourage active savings programs._
Republican Medicare Plan Update
As Republicans begin to release information about their Medicare reform plan, new elements emerge. Faced with cutting $270 billion from the program, Republicans’ final proposal (due out within the next few weeks) will include
- Increased Part B premiums. Already scheduled to rise, monthly premiums would increase to about $75.
- Emphasis on HMOs. Financial incentives will be used to encourage enrollment in HMOs, which Republicans believe will save the government money.
- Medical savings accounts. The plan may include vouchers, with beneficiaries’ savings placed in accounts for future years’ medical care.