The COVID-19 pandemic could undermine the financial security of the next generation of retirees, according to a blog post by Richard W. Johnson, director of the Program on Retirement Policy at the Urban Institute. He compared the economic fallout from COVID-19 with the effect of the 2007–2008 financial crisis and Great Recession that followed and suggested that “the current crisis could wipe out existing retirement savings, hinder additional savings and threaten public and private retirement systems.”
Policymakers can help retirement income go further by improving health services and long-term care, Johnson suggested.
“Seniors’ out-of-pocket medical costs are projected to increase 40 percent relative to income over the next two decades, and the need for expensive home or residential care after mobility or cognitive limitations emerge may be the greatest financial risk most older adults face,” he said.
Possible solutions include a unified Medicare deductible and capping out-of-pocket Medicare expenses, facilitating private long-term care insurance coverage and creating public programs to finance long-term care, he said.