Center for Economic Policy Research
WASHINGTON, D.C. – A 54-year-old today will have to save an additional $182,000 in their IRA or 401(k) before he or she retires just to pay for the House Republican plan to eliminate Medicare, an analysis released today by U.S. Rep. George Miller (D-CA) found.
The Center for Economic and Policy Research (CEPR) estimated that individuals born in 1957 would need $182,000 by the time they retire at 65 to pay the additional costs imposed by the Republican plan if they live to 84. The analysis was included in a letter to Rep. Miller.
“Under the Republican plan, seniors will go into debt. They will be forced to sell their homes that they spent a lifetime paying off. And they will have to rely on their children just to pay for basic medical care,” said Miller. “This is not what anyone would envision as a dignified retirement.”
Last month, House Republicans voted to end the Medicare program, which offers guaranteed benefits, and replace it with a plan that would force seniors to find private insurance with the assistance of a voucher. Since the voucher’s value relative to health care costs would decrease over time and private insurance costs are higher than traditional Medicare, seniors retiring in 2022 under the Republican plan would be forced to pay much higher costs than under current law.
As a result, CEPR found that the average senior beginning in 2022 would have to save $182,000 to cover these additional costs, assuming a return of 3 percent in real interest during their retirement years.
“Congress needs to make sure Medicare is sustainable for seniors in the future and sustainable for taxpayers. We took a substantial step towards this goal through the Affordable Care Act,” said Miller. “But, a few things are certain: you don’t save Medicare by abolishing it. And you don’t help seniors have a dignified retirement by forcing them into poverty.”
Approximately half of all workers do not have any retirement savings at all. The Employee Benefits Research Institute estimates that the average retirement savings shortfall was more than $47,000 per individual in 2010.