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Baby Boomers Worry More About Gas Prices, Medical
Costs Than Retirement
April 19, 2006 - More Baby Boomers are concerned
about gas prices and uninsured medical costs than about retirement and
other long- term expenses, according to a new poll conducted by Harris
Interactive for the American Institute of Certified Public Accountants (AICPA).
This survey targets Baby Boomers but has advice on saving money that is
valuable for senior citizens or anyone managing a household.
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Baby Boomers |
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"The mounting costs associated with a trip to the
hospital or an unusually cold winter, have the potential to disrupt
consumers from saving for retirement," said Carl George, CPA, Chair of
the AICPA's National CPA Financial Literacy Commission and CEO of
Clifton Gunderson LLP. "Consumers are juggling today's real financial
pressures at hand and trying to save enough for their retirement."
The results of the poll revealed that 51 percent of
Americans age 45 and older have greater worries about short-term
financial issues -- rising energy costs, uninsured medical expenses,
price of gas and credit-card debt -- than they do about longer-term
concerns like caring for aging parents, lack of savings for an emergency
and even retirement itself.
"The higher these rising costs are today, the more
time Americans will have to spend working to replace those funds that
were earmarked for retirement," added George. "In some cases, this could
mean working additional years to recoup what is spent today on
necessities. Americans need to remain focused on their savings goals and
plan for contingencies like medical, education and energy cost increases
in order to have a realistic view of how they are going to reach those
goals."
Steps Boomers and Seniors Can Take to Stay on
Track to a Comfortable Retirement
The AICPA's 360 Degrees of Financial Literacy
program has set up a consumer Web site,
http://www.360financialliteracy.org/, with hundreds of free tools
and resources to help educate consumers about personal finance matters,
including retirement.
Below are some steps baby boomers can take in order
to plan for any contingencies related to an unexpected rise in costs for
basic necessities:
1. Stick to Your Plan -- Keep Saving.
You already should have been working off of a
savings plan at this point in your life and have progress towards
building your retirement nest egg. Try to keep saving so that you
maintain momentum toward reaching your goals. Take some proactive steps
such as those shown below to help minimize the risk of unexpected
expenses.
2. Have an emergency fund.
The years ahead could prove to be a bit bumpy --
especially with higher interest rates and rising energy costs -- so it
is advantageous to have a financial cushion. Set your sights on saving
between three and six months worth of living expenses; this includes
rent or mortgage, food, utilities, debt payments and other regular
expenses you can't put off even in an emergency.
Remember, emergency-fund money has to be safe and
accessible, so steer clear of longer-term instruments like Certificates
of Deposit (CDs). You'll want to investigate money market accounts or
traditional savings accounts.
3. If You Can't Beat 'Em, Join 'Em.
Consider carpooling as a way to minimize the impact
of rising gasoline prices. If you frequently carpool to a job, or to
children's activities, you'll want to change your liability insurance
coverage to reflect the additional passengers in your car.
Eighty-five percent of people who carpool overlook
this, according to a recent study by the Independent Insurance Agents
and Brokers Association of America. Also shop around for the best
gasoline prices in your local area -- some Web sites track local prices:
http://www.gasbuddy.com/ or
http://www.gaspricewatch.com/.
4. Make Your Home More Efficient.
One way to help manage the rising energy and home
heating costs is to winterize your home.
● Make sure your windows and electric sockets
are properly sealed and insulated.
● Manage your thermostat more effectively,
lowering it by a degree or two from your normal temperature.
● Turn off lights and electronic devices when
they are not in use.
● Use fans instead of air conditioners to cool
the interior.
● Take short showers instead of baths.
The U.S. Department of Energy has predicted a 16
percent increase in average heating-oil prices this winter compared to
last year. Heating oil prices during the 2004-2005 heating season were
34 percent higher than the previous winter.
● Consider ordering your home heating oil
further in advance before shortages and price increases occur.
When combined, these small steps can save you money
in the long run.
5. See a Specialist.
Seek the help of a personal financial planning
specialist such as a CPA if you are faced with a larger unanticipated
expense like a medical situation. Since this has the potential to erode
your retirement savings, a specialist may be able to help you design a
plan to counteract the effect.
About information source:
Harris Interactive surveyed 1,000
U.S. adults 18 and older during March 2006 under the aegis of the AICPA
360 Degrees of Financial Literacy campaign.
The American Institute of Certified
Public Accountants (http://www.aicpa.org/)
is the national, professional association of CPAs, with approximately
330,000 members, including CPAs in business and industry, public
practice, government, and education; student affiliates; and
international associates. It sets ethical standards for the profession
and U.S. auditing standards for audits of private companies; federal,
state and local governments; and non-profit organizations. It also
develops and grades the Uniform CPA Examination.
Links:
http://www.360financialliteracy.org/
http://www.gasbuddy.com/
http://www.gaspricewatch.com/
http://www.aicpa.org/
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