Retirement

Germany was the first country to provide workers with a comprehensive plan for social security. There, in 1881, Germany's imperial chancellor, Prince Ottovon Bismarck, announced his plan to offer workers subsidized insurance against sickness, accident, and old age. In 1932, Franklin D. Roosevelt was elected President of the United States on a platform that promoted a social security program that would protect retirees against undue hardship, and that wouldprovide them with an incentive to move out of the work force and make room for younger workers. After a 14-month fight in Congress, the Social Security Act was signed into law on August 14, 1935.

In over 60 years, there have been many additional government and private-sector agencies available to help meet the special needs of retired persons; these include Public Health Departments, Senior Centers, Social Service Agencies,the United Way and the American Association of Retired Persons (AARP). Although it appears that most retirees prefer to retire in a place specializing inretirement communities, such as Del Webb's pioneer Sun City (1960) in Arizona, many have sprung up near all major population centers. Most retired peopleobtain their retirement income from two or more of the following sources: social security retirement benefits, pensions and retirement plans (including IRAs and 401k plans), working part- or full-time, savings (especially amountsset aside after age 50), inheritances, gifts, early retirement bonuses, or withdrawal of equity form their homes.

In 1993, nine states had more than 1 million retired residents. California, with 3.3 million, led the way, followed by Florida, New York, Pennsylvania, Texas, Ohio, Illinois, Michigan, and New Jersey. During the 1980s, the largestincreases in percentage of retired persons were mostly in western states andsoutheastern coastal states. According to the U.S. Census Bureau projections,the retired population will more than double between now and the year 2050 to 80 million. By that year, as many as one in five Americans could be retired. Most of this growth should occur between 2010 and 2030, when the baby boomgeneration enters their retirement years.

Poor health is not as prevalent among retired persons as many assume. In 1992, about 3 in every 4 noninstitutionalized persons aged 65-74 considered theirhealth to be good. Two in three aged 75 or older felt similarly. On the other hand, as more people reach old age, there may also be more who face chronic, limiting illnesses such as arthritis, diabetes, osteoporosis, and senile dementia.

While 1% of those aged 65-74 years lived in a nursing home in 1990, nearly one in four aged 85 or older did. Among those who were not institutionalized in1990-91, 9% aged 65-69 years, but 50% aged 85 or older, needed assistance performing everyday activities such as bathing, getting around inside the home,and preparing meals. Most people who require long-term care have suffered from physical problems such as heart attacks, strokes or other debilitating problems, and not mental disabilities such as Alzheimer's disease.

Consequently, the ability to live independently and avoid long-term care facilities rests to a large extent in the hands of the retired person. Studies have shown that by exercising, the retired person increases his or her chancesof staying out of a nursing home between the ages of 65 and 80. Many retireesin their 60s and 70s who are in reasonably good health manage their increased health care costs by supplementing their free Medicare coverage with a reasonably priced medi-gap insurance policy.

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