The Department of the Treasury and the Internal Revenue Service released new guidance that is “designed to expand the use of income annuities in 401(k) plans.”
April 06--MIDLAND -- Paul Anthony thinks Mitchell Silver said it best.
"We sacrifice our todays for their tomorrows," the Midland Council president recalled. "I'll remember that until the day I die."
Silver, a renowned city planner from Raleigh, N.C., warned local community leaders about the approaching "silver tsunami" of aging residents during a presentation last fall for the Beaver County Regional Council of Governments. He urged them to prepare.
Some have, some haven't.
The fact is the county's five-year median age estimate is now 44.2 years, according to the 2012 U.S. Census American Community Survey, and it's only expected to rise as the wave of more than 70 million baby boomers reach retirement age.
The economic challenges posed by the population trend go beyond towns and boroughs, though, touching everything from businesses and the workforce, housing, health care and medical services, as well as individuals and families.
Midland officials heard Silver's warning.
With new development and blight management plans, the borough has been working to bring in businesses and amenities for residents, who now must travel to Ohio for things such as groceries or to Brighton Township for medical care. Adding to the difficulty is that transportation is limited in the out-of-the-way town.
"We'd like to have services available in the town where it's a walkable type of thing that (older residents) don't have to have transportation," said Diane Kemp, borough manager.
"We don't have a grocery store, we don't have a cleaners," she added. "There are so many things that most small towns have that we're lacking right now, (and) we'd like to be able to attract them for our residents."
Alexander Andres, a Beaver councilman, said a thriving business district has proven to be very attractive to older residents in the borough.
"It is a very walkable town. Anything you need is down here; there's a hardware store, there's a grocery store, a bakery, hairdressers, doctors, dentists, coffee shops, restaurants," he said. "So it's very convenient for the elderly to just come down and shop."
Officials have even noticed a trend of older adults moving back into the town, Andres added.
"People who have grown up in Beaver and have moved away for one reason or the other are actually coming back to Beaver to spend their golden years," he said. "This is their dream of retirement, not going to Florida or Arizona, but actually coming back to the place where they grew up."
Not every community can address all of their residents' needs, but they can work together to do so, said Rebecca Matsco, chairwoman of the Potter Township Board of Supervisors and vice president of the county COG.
It's an urgent conversation, she stressed.
"You are never going to find the height of nightlife in Potter Township, but (we can say) here are all places we can go to have a nice meal," she said. "We need to recognize our interdependence among communities and actually strengthen that."
Kemp noted Midland and four surrounding municipalities are in the process of doing just that with multiple-municipal planning.
As part of an older adult task force at First Presbyterian Church in Beaver, Matsco has been asking the question: How, as a congregation, do we address the area's aging population?
Churches feel the effects of aging acutely, Matsco said, but she knows the question applies to communities as well.
"We often put this idea of aging in the health care slot, but it's definitely an economic development issue," she said.
Vanport Township officials have had to be creative in their development and planning over the years, faced with two senior-dominated housing blocks, limited space and the highest five-year median age estimate in the county -- 58.8 years.
Commissioners Chairman Ronald Nardick said the township hasn't specifically addressed its aging population, but keeping taxes low and maintaining services has always been a priority because of the demographic.
"Vanport is one of the few communities that has a higher senior citizen population and we, as a board, we're cognizant of that every time we make out our budget because people live on fixed incomes," he said, noting that the township often partners with other communities for services, such as police.
Both personally and ethically, Andres feels it's important for communities to take care of older residents' needs.
"I think the older generations have done a lot for us and we describe them as the Greatest Generation ever and baby boomers, and basically we owe everything to them. ... As they get older I think it's only fair for us to provide for whatever needs they may have."
Albert Horn, New Sewickley Township Planning Commission chairman, said officials were surprised while developing a new comprehensive plan last year, when they realized how much their population has aged, and how big of a demand there is for services and housing for seniors.
"What's this older person going to do 10 years from now, when that house is going to become a real headache?" Horn said of the need for senior housing in the mostly rural community.
"Let's face it, people are getting older and that's obvious, but they're living longer and the intent is for them to live longer, being more active and enjoying longer," Horn said. "So you've gotta give them a way (to) do that."
Andres said that's key.
"(Older people) want to try to live as independently as possible, and if what we can do to improve our amenities so that they are capable of really living independently, I think that's the best solution," he said.
New Sewickley now is re-evaluating its zoning to allow for such development, and also to bring in younger families and individuals. A mix is necessary for growth and success, Horn said.
"I always tell (planning board members) that the decisions you make today are what it's going to look like 50 years from now. It's not the next day from now ... it's 50 years that's going to tell if we did a good job," he said.
Matsco said whether planning for the young or old, "what's good for people is good for people."
"Having a healthy economy is good for people and having a diverse economy is good for people," she added.
In Midland -- where the five-year median age estimate of 40.9 is actually on the lower end for the county -- officials are looking at development across the age spectrum, according to Anthony.
"We want to maintain what we have, but we also want to attract younger people in a more cultural way down here," he said. "We have to praise our senior citizens because they're the ones who got us to this point, but now we have to go to the next level."
CHALLENGES AT HOME
For older adults, even some of the best planning and saving still may not be enough to maintain basic needs after retirement, research shows.
The Elder Economic Security Standard Index, developed by the Gerontology Institute at the University of Massachusetts Boston and the nonprofit Wider Opportunities for Women, measures the income that adults age 65 and older require to maintain their independence and meet their daily costs of living, including housing, transportation, health care and other needs.
The index uses U.S. Census American Community Survey (ACS) data for median household incomes, and breaks down expenses according to several factors, including older adults who own a house with a mortgage, those who own a house without a mortgage and those who rent.
On average, an elder couple in excellent health requires an annual income of $32,116 to meet their basic needs. A couple in good health requires an annual income of $33,700, and a couple in poor health requires an annual income of $36,652.
According to ACS five-year estimates from 2008-2012, Beaver County households age 65 and older had a median income of $30,782 -- not enough to meet even the index for elders with the lowest health care costs.
In developing the elder standard index, researchers concluded that many older adults who are not considered "poor" according to the poverty level, still do not have enough income to meet their basic needs.
An estimated two-thirds of early boomers -- the oldest of the baby boom generation -- are financially unprepared for retirement, meaning they have not saved enough money to maintain their lifestyle, according to a 2008 independent report by the McKinsey Global Institute (MGI), the research arm of McKinsey & Co. global management firm.
The retirement of baby boomers poses an economic challenge for decades to come, the MGI report concluded, and they must decide if they will find a better way to retire, or be known as the generation who had money, spent it and left economic turbulence in their wake.
One solution posed by researchers was to extend the median retirement age by about two years, allowing more individuals to better prepare and keeping the country's economy strong.
Everyone's situation is different depending on finances and needs, but Joanne McDermitt, the Apprise Program coordinator for the Beaver County Office on Aging, said all older adults eventually have to make important decisions about their care as they age and how to pay for it.
Each year the United States spends $275 billion on long-term care, according to the SCAN Foundation, a charity devoted to transforming care of older adults. Of that amount, 47 percent is paid by Medicaid, 23 percent is covered by Medicare, 23 percent falls to families, less than 4 percent is covered by veterans or state programs, and less than 3 percent is private long-term care.
Apprise connects older individuals to income-based benefit programs, such as the state's PACE prescription assistance program, and other resources to help them fill in financial gaps. The program also provides health insurance counseling for those considering Medicare or other coverage.
McDermitt said she often sees individuals who struggle to keep up with expenses despite advanced planning.
"Economically, it's been a really rough couple of years and health care costs are always increasing and rising; the costs of medications are rising," she said.
But even though future needs may be unpredictable, it's still important to discuss plans and options for retirement as soon as possible, McDermitt said.
"You definitely need to have some kind of plan even if you just sit down with your family and say these are some of my wishes," she said. "It's just important to let your family know -- or someone that you're very close to -- to help make these decisions."
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