Guest blog: Long-term care and support- how does it work in the US?

Older woman with carer

Age UK has been sharing a series of guest blogs with the AARP Public Policy Institute. Our latest post comes from Donald L. Redfoot, Senior Strategic Policy Advisor. AARP is a nonprofit, nonpartisan organisation, with a membership of more than 37 million older people across the USA.

Even experts find it challenging to understand the United States’ fragmented system of providing long-term services and supports (LTSS) to older adults and people with disabilities. Those who need services are often utterly baffled. The following discussion is designed to help international observers comprehend US public policies designed to support people with LTSS needs. Continue reading “Guest blog: Long-term care and support- how does it work in the US?”

New UK annuity reforms – lessons from the US

Photo credit: Linus Bohman (Flickr Creative Commons)
Photo credit: Linus Bohman (Flickr Creative Commons)

This week’s guest blog is from across the Atlantic. David C. John is a senior strategic policy advisor at the AARP Public Policy Institute. AARP is a nonprofit, nonpartisan organization, with a membership of more than 37 million older people across the USA.

 American experience strongly suggests that the coming UK pension freedoms sound better in theory than they will work in practice.  After nearly a decade where the UK has been the gold standard for retirement savings policy, it is about to take a step that it may regret.

As annuity purchases are not required, very few Americans buy them, feeling that they are spending a great deal of money for a comparatively small monthly income.  Even those in traditional DB pension plans usually take a lump sum if they are allowed to do so.  As a result, many US retirees spend unwisely, trust the wrong financial advisor, or make other financial mistakes.

Many people greatly overestimate how long their savings will last.  Most others assume (often wrongly) that they can manage their own money as well as anyone else or that they can live comfortably on Social Security alone.  US Social Security pays a benefit that depends on the retirees’ individual income history.  The average annual amount is about $13,000 (GBP 8,700).

One survey found that in West Virginia, a state with a relatively low average income, 78% of those near retirement and 67% of those at retirement would likely outlive their financial assets.  Workers with lower incomes are most at risk.  A recent national study found that by the 20th year of retirement, more than 81% of Americans with incomes up to $27,000 would run short of money, as would 38% of those earning up to $42,000, and 19% of those with incomes up to $65,000.  Even 8% of those with the highest incomes could not meet their expenses. Continue reading “New UK annuity reforms – lessons from the US”