As I stated in my comment in the previous blog post, I was surprised that healthcare was not among the top two expenditures on the table. This is probably because I have heard so much about how rising healthcare costs, especially when it comes to pharmaceuticals in the United States, has been hurting people’s retirement savings. For example, according to this time article (linked below), a study found that a healthy 65-year-old couple could be spending $400,000 on health care in their remaining years. This is a lot of money to be spending – as a result, a majority of people are stressed about their retirement savings, and this could have detrimental effects overall on the economy. Karen mentioned how baby boomers will start retiring soon, so retirement is an important economic issue to look at in the coming years. According to the same article, “nearly half of boomers report having zero retirement savings. And a rising percentage say that Social Security will be a major source of retirement income.”
While this is surprising to hear, looking at FRED and health expenditures per capita, we can see that there has been a dramatic increasing trend since the 2000’s – this graph only goes till 2013, so if the trend has continued (which I’m assuming it has) then healthcare per capita is probably double the amount it was in 2000 (from 4,000 to about 8,000 in U.S. dollars). This suggests that healthcare will continue to be a large source of expenditure for individuals – and has a good chance at remaining in the top three expenditures for retirees – especially if we remember the graph we looked at in class on Thursday, where expenditures rose with age in the United States as opposed to going down in other countries.
Though health deteriorates with age, and we can expect to spend more on health care as we get older, I wonder what types of policies and programs could help the aging population (especially retirees) decrease the cost of healthcare to where it is more affordable.