Tough Times Loom for Massachusetts Retirees: EBRI Study

January 17, 2003 ( - More and more Massachusetts retirees are expected to turn to the government for help through Medicare as incomes increasingly fall short of their basic living expenses and medical costs.

That was the conclusion of a recent study by the Employee Benefit Research Institute (EBRI) and the Milbank Memorial Fund, which found that retirees’ income shortfall is expected to reach $655 million in 2003 and nearly $1 billion by 2031.

Many retirees, including a majority of single women and a substantial number of single men, will ultimately conclude they simply don’t have enough income even for a basic lifestyle, the study said. The problem is expected to be less acute for married couples, but substantially more severe for those who require more than 121 days of home health care.

“The elderly in America have long had political power greater than their numbers,” researchers wrote. “As the senior population grows and emphasis on retirement adequacy increases, there will inevitably be growing demands for increased government assistance. For the moment, government at the state and federal level is struggling to find ways to keep health care and pension promises already made to this group.”

The study pointed out that current Capitol Hill debates about adding a prescription drug benefit to Medicare would not help the much larger problem of retirees’ long-term care expenses as seen in Massachusetts and other states.

The situation described by the study has limits on both income and expenditure definitions. Income includes only retirement payments, including Social Security, and net housing equity, but excludes wages or investment income. Expenditures tracked are limited to food, housing, and medical care.

The full report is available at  EBRI’s Web site .