Retirees rank inflation at the top of their list of financial concerns, according to a February survey by Millionaire Corner that shows senior citizens are also preoccupied with health care costs and having enough money for retirement.
Investors who’ve not yet retired worry most about saving enough money ror retirement. Working Americans worry about to a much lesser extent than retirees, and are almost equally concerned with job security for themselves or their spouses and with reducing their debt levels. Less than 9 percent of non-retired workers worry about inflation.
U.S.inflation rates, as measured by the Consumer Price Index, hit 3.9 in September 2011 but subsided to near 3 percent by the end of the year. The latest data from the Commerce Department estimates the cost of living to be rising at an annual rate of 2.9 percent and most observers, including Federal Reserve Chairman Ben Bernanke, expect inflation to remain moderate for the foreseeable future.
Overall inflation is relatively tame, but federal data shows that health care costs are rising at an annual rate of 4.7 percent, a significantly higher rate than the average for all goods and services. These rising health care costs place a greater burden on senior citizens than the population at large because health care costs account for a disproportionately higher percentage of spending in elderly households,
The trend shows now signs of easing, according to a White House report that shows health care spending is accounting for an increasingly larger share of the gross domestic product of GDP. U.S. healthcare spending accounted for 17.6 percent of GDP in 2009, almost double its share in 1980, according to the White House. The Congressional Budget Office has estimated that health care spending could account for one-fourth of GDP by 2025 and one-third by 2040. The White House notes that steady growth in health care spending places an “increasingly heavy financial burden” on families, who are paying an increasingly larger share of total compensation on medical costs.
Rising health care spending is one of several factors eroding the ability of Americans to save for retirement. A press release from the Consumer Federation of American highlighting this week’s America Saves Week, shows that the share of Americans who spend less than they earn - and save the rest - has shrunk from 73 percent in 2010 to 66 percent in 2012. The share who feel they are saving enough for retirement declined from 60 percent to 52 percent over the same period.
A recent survey by Bankrate.com, shows more than twice as many Americans feel “less comfortable” as opposed to “more comfortable” about the amount of their savings compared to 12 months ago. A slightly higher percentage feels worse off today than a year ago, compared to those who feel better off, but nearly half of Americans feel their overall financial situation is “about the same.”
Retirees worry more than the non-retired about the value of their primary residence, but are slightly less concerned about financing the education of their children or grandchildren.