Retirees tighten the belt, but still struggle

http://bottomline.msnbc.msn.com/_news/2012/02/14/10406746-retirees-tighten-the-belt-but-still-struggle

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As the rebound in the U.S. economy helps boost income and spending among working-aged households, older Americans relying on retirement income are having a hard time paying the bills.

Despite steady belt-tightening as they age, retirees' incomes just aren't keeping up, according to a review of the latest data by the Employee Benefits Research Institute. On average, retired households spend about 80 percent of what working households spend, but their earnings are only 57 percent of what working households take home.

Not surprisingly, retired Americans spend a rising portion of their income on medical expenses as they get older. Health care cost consume roughly 13 percent of spending by those 65 and older -- more than double the 5.3 percent of spending for those 45 to 54 and just 4.0 percent for those under 25, according to the Bureau of Labor Statistics. That rises to about 20 percent of total spending for those ages 85 and over, according to the EBRI.
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With government health care spending soaring, Congress is wrestling with various proposals to contain costs. That doesn't bode well for retirees who already face higher health care bills than younger households.