Washington, D.C.– A 54-year-old today will have to save an additional $182,000 in their Individual RetirementAccount or 401(k) before retirement to pay for the House Republican plan to eliminate Medicare, an analysis released today by Rep. George Miller (D-Calif.) found.Miller is the ranking member of the House Committee on Education and The Workforce, of which Grijalva is a member.
In the analysis, sent as a letter to Miller, 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 age 84.
“If Republicans get their way, seniors will go into debt, potentially be forced to sell their homes, and rely on their children to pay for basic medical care,” Grijalva said. “That doesn’t qualify as a full retirement, and it certainly shouldn’t be the standard we set in the twenty-first century in the United States.”
Last month, House Republicans passed their fiscal year 2011 budget proposal that ends Medicare’s guaranteed benefits and replaces it with a voucher system to make seniors find affordable private insurance. 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.
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.
“You don’t save Medicare by abolishing it,” Grijalva said. “And you certainly don’t help seniors enjoy their well-earned retirement by forcing them into poverty.This plan isn’t in the public interest, and I think that’s why you see it getting rejected at town halls all over the country.”
Approximately half of all workers do not have retirement savings. The Employee Benefits Research Institute estimates that the average retirement savings shortfall was more than $47,000 per individual in 2010.