Financial Literacy - Retirement income planning
Senator Kohl
Seniors to benefit from health care reform

Because the elderly tend to be heavy consumers of health care, many of the improvements to our health system brought about by reform will be of benefit to them.

For instance, the expanded use of health information technology will save lives by reducing medical errors and save money by promoting efficiency in testing and communication. Insurance reform will ensure that those who have suffered from a health problem in their past should not be denied insurance that will protect them for the future.

q_v2.gif In general, what are some of the health care issues that need to be addressed for the aging population?

a_v2.gifI have been pushing for health reform to include improvements to our long-term care system. Our nation's population is aging at a record rate, and with every passing year, more elderly Americans find themselves in need of long-term care.

Most of us will, at some point, struggle with the high and rising costs of caring for a loved one. These, too, are costs we must get under control as part of health care reform.

One way to get long-term care costs under control is by promoting a move toward home and community-based long-term care services in Medicaid. These programs break away from a one-size-fits-all approach, offering flexibility and choices tailored to an individual's needs. And, even better, they save a lot of money that would otherwise be spent on nursing home care.

The funding of care is not our only concern. It's been 22 years since we raised the standard of care in nursing homes, and quality improvements are long overdue.

Every year, as part of our Medicare and Medicaid reimbursement system, our government collects information about all 16,000 nursing homes across the country. We should make this information available to consumers, so that they can judge a home's track record of care for themselves before deciding where to place a loved one.

And we should make nursing homes safer, by instituting a comprehensive background check system for long-term care workers. Pilot programs have shown that this would keep thousands of predators out of nursing homes, where they could cause terrible physical, financial and emotional harm to residents and their families.

I am pleased that the Senate Finance Committee included provisions to do all these things in their health reform legislation.

q_v2.gif You are one of the lead sponsors of the Elder Justice Act. As seniors are often the targets of scams and fraud, what are some steps older people need to take before investing money with someone?

a_v2.gifIn these tough economic times, seniors are discovering that their life savings have lost so much value they may not be able fund their retirement. Desperate for advice, they look toward investment advisers for strategies to ride out this economic storm. More and more, individuals are representing themselves as certified "senior" investment specialists when they often have limited or no education and experience in extremely complicated financial matters.

It's estimated that there are thousands of individuals holding themselves out as "senior" specialists. Although some of them may have legitimate credentials, far too many do not.

Older Americans should be wary of these salesmen using elaborate titles to pass themselves off as impartial advisers with a particular expertise. We held a hearing last Congress on this subject and introduced the Senior Investor Protection Act to encourage states to adopt standards related to which legitimate designations can be used by financial advisers when selling annuity or security products to seniors.

q_v2.gif You've worked to bring more protections to American's 401(k) plans, bringing more transparency to the fees charged to plan participants. How viable do you believe the 401(k) plan is as the sole savings vehicle for most people's retirements? Is it really enough?

a_v2.gifThough we appreciate that the 401(k) system has helped make it easier for millions of Americans to save for retirement, the system has several weaknesses. Through the 401(k) system, the U.S. foregoes $46 billion in tax revenue each year, with the highest tax-break incentives to save going to the wealthiest Americans.

Meanwhile, individuals are forced to make vital decisions -- such as participating in a plan to begin with, how much to contribute, where to invest their money and so on. And then they must resist the urge to tap into their accounts with hardship withdrawals and loans.

But with defined benefit (traditional pension) plans on the decline, 401(k)s are at present the main retirement savings vehicle for most Americans, and as such we are working hard to improve this system.

q_v2.gif Bankrate recently sponsored a survey that reveals that 75 percent of Americans plan to work through their retirement. Why is that? Do people enjoy working or are there problems with funding their retirements?

a_v2.gifAccording to another recent survey, 80 percent of boomers expect to work past traditional retirement age. Whether they do so for the physical and mental benefits, for additional income to help stretch their retirement savings or simply because they want to remain active and contributing members of our society, we must provide support to them as they choose to continue to work during what is the second act of their careers and their lives.

I have been joined by several of my colleagues in introducing legislation to make it easier for older Americans to either re-enter or remain in the work force by extending health benefits and encouraging employers to provide part-time work opportunities.

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