3 Retirement Issues That Exist Today but Didn’t Exist 20 Years Ago
Written by
Andrew Lisa
Edited by
Amber Barkley
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The oldest baby boomers are turning 80 this year in a country where people are living longer, chronic conditions are becoming more common and retirement seems increasingly out of reach for ordinary seniors — but it wasn’t always that way.
Twenty years ago, at the start of the 21st century, the retirement landscape looked much different, largely because of three issues that were out of mind back then but impossible for retirees to ignore in 2025.
Healthcare Super-Inflation
Fidelity’s 2024 Retiree Health Care Cost Estimate report found that today’s seniors can expect to spend $165,000 on healthcare and medical costs throughout their retirements — more than double the study’s inaugural estimate in 2002.
Inflationary pressures make everything more expensive over time — but over the last 20 years, late-life healthcare has been in a class by itself.
Wealthtender analyzed historical CPI data to show that healthcare inflation has risen by 3.36% since 2002, compared to 2.53% for overall inflation. That difference might seem negligible for younger adults who spend less, but considering healthcare costs can leap from 15% to 50% of your budget in retirement, what was a costly but largely manageable expense 20 years ago has become a primary nest egg killer today.
Few Will Be Able To Afford Long-Term Care
According to the National Council on Aging (NCOA), roughly seven out of 10 people turning 65 today will need some form of long-term care (LTC) in their lifetimes. However, Statista reports that the average annual cost is $26,000 to $127,750, depending on the type of service, which puts LTC out of reach for most ordinary families.
Two decades ago, LTC insurance was still widely available — but not anymore. When reporting on the crisis in 2021, CNBC found that insurers had badly mispriced policies in the 1990s and early 2000s, which forced them either to jack up premiums to unaffordable levels or, more commonly, abandon the LTC market altogether.
Either way, the result is that today, insurers issue just a “tiny fraction” of the policies they sold 20 years ago.
Financial Instability Is No Longer the Exception
A 2024 NCOA report found that the COVID-19 pandemic was a watershed moment for financial security among America’s retirees. Living on a fixed income was always a challenge, but the COVID-19 crisis forced more retirees to get by with less.
In 2020, roughly 50% of adults 60 and older had household incomes below their area’s Elder Index, meaning their average income wasn’t enough to afford their basic needs. That was a 5% increase over 2018 alone, and the decline in household wealth relative to expenses for seniors has declined even more dramatically when compared to 2016 data — much less data from 20 years ago.
More From GOBankingRates
Sources
- Fidelity, “Fidelity Investments® Releases 2024 Retiree Health Care Cost Estimate as Americans Seek Clarity Around Medicare Selection.”
- Wealthtender, “The Cost of Healthcare in Retirement Keeps Rising. These Tips Will Help You Prepare.”
- CNBC, “Aging baby boomers raise the risk of a long-term-care crisis in the U.S.“
- National Council on Aging, “Increases in Older Americans’ Income and Household Assets Still Cannot Support Most During Financial Hardship.”
