It is really about self-reliance.

Fidelity's most recent report on the cost of health care in retirement (see Fidelity® Estimates Couples Retiring In 2012 Will Need $240,000 To Pay Medical Expenses Throughout Retirement at http://www.fidelity.com/inside-fidelity/individual-investing/retiree-health-care-costs-2012) offers some sobering statistics on what it costs to get elded and not have, or not be able to have, a job or other source of income other than Social Security.

If you were retiring now and would be relying on Social Security as your primary source of income in retirement, by 2027 your health care costs would consume approximately 61% of your SS benefits according to the most recent Fidelity study (see URL above).  These costs represent stuff that your Medicare will not cover.  Medical costs are still going up faster that SS cost of living adjustments and salary increases, so the average percentage will be increasing to the 61% over time.  And of course medical needs are increasing as we get older as well.  Fidelity's estimate includes the out-of-pocked costs for deductibles, co-payments, premiums for optional coverage for doctor visits and prescription drugs, hearing aids, eyeglasses, and other items not covered by Medicare.  It does not include any costs associated with nursing-home care and applies to retirees with traditional Medicare insurance coverage.

So, what does all this have to do with Growing Old Alone?  These are, of course, issues that we are all facing, regardless of whether or not we have given birth to cute little annuities (ie children).  But for us who are childless, these stats point towards lessons we should learn now, if we have not already.  These lessons include:

• Take advantage of every opportunity to remain self-reliant.
• Be diligent in protecting your health and your mind.
• Save.  Now.  It is not too late.
• Don't count on SS providing a decent standard of living as you eld.  SS was never intended as a retirement plan.  It is a program designed to keep you from having to live in a cardboard box.
• Consider working as long as you can.  It may not be what you want, but it may be what you need.
• Develop a financial plan early.  And be realistic about it (see earlier posts).
• Develop good mental habits early (see earlier posts).

No one is going to pay for your health care as you age but you, unless you become destitute and qualify for Medicaid.  You've already paid for Medicare (those annoying payroll deductions), you may have already paid (if it makes sense for you - see earlier posts) for long term care insurance.  You will pay for any further medical costs not covered by these two sources from whatever other assets or income you have.  This is strong argument for self reliance (that could be the subject of a whole 'nother blog).

If reliance on SS and Medicaid is your plan, then, given the rhetoric in Washington these days, I would advise looking for a comfortable cardboard box now.

Michael