President Obama’s 2010 budget includes initiatives to expand retirement savings by including automatic individual retirement accounts (IRAs) and an expanded Saver’s Credit for retirement savings contributions. The budget proposal would require employers who do not offer a retirement plan to enroll employees automatically in a direct-deposit IRA program. Employees would have the option to not participate. The budget also calls for an expanded Saver’s Credit that would provide families with income of up to $65,000 per year with a refundable credit of 50% of the first $1,000 of retirement contributions.
A recent study performed by the American Association of Long-Term Care Insurance found that some 400,000 individuals purchased LTC insurance in 2008, with the overwhelming majority (84%) under the age of 65. The study, which analyzed data on 215,000 buyers of individual long-term care insurance, also found that three fourths (76%) opt for coverage for a specific number of years. In 2008, some 53% of individual buyers were between ages 55 and 64, compared to 50% the prior year, the study found. Another 24% were between ages 45 and 54.
“The age of buyers keeps dropping as consumers–especially baby boomers–understand the cost-saving benefits of locking in good health discounts and ways to make protection more affordable,” says Jesse Slome, the Association’s executive director. “The most expensive long-term care insurance policy is one with an unlimited benefit period (one with no cap on the number of years benefits will be received),” he says. “Consumers are right-sizing their protection taking into account available savings and retirement income. This cost-sharing approach can reduce the cost of protection by 30% or more.”