Wild Card #4. New Technologies to Aid Home Based Elderly

In April of 2009 GE and Intel announced a joint research and development effort to help improve the technology in home health care. The two companies plan to invest $250 million dollars on the project over the next five years. Right now GE has already started development on a system that monitors the health of patients in nursing homes. This technology features a system of sensors that are set by the physicians to monitor the patient, and in the event something changes the system will sound an alarm to notify the health professionals. Intel has started development on a two way video monitoring feed. GE and Intel hope to capitalize on these emerging technologies to offer these products for patients in their homes.

As the baby boomers enter retirement there will be a larger segment of the population who will need home monitoring. It is positive to see this substantial investment in health technology. The two companies could ultimately use technology to help lower health care costs, and help to improve the quality of care.

Main Article. US News and World Report. (2009, April 03). Health Buzz, GE, Intel Plan Home-Health Venture and Other Health News. Retrieved April 10, 2009 from. http://health.usnews.com/articles/health/sleep/2009/04/03/health-buzz-ge-intel-plan-home-health-venture-and-other-health-news.html

Wild Card Blog #3 – Superficial Look at the Baby Boomer Effects on the Economy.

What is a “Baby Boomer”?  That would be anyone born during the years 1946 to 1964, according to the US Census.  The baby boomer generation was born after the great depression, and World War II.  Many of the available figures say the baby boomer population size is 70+ million strong.  This number represents a very large portion of the US total population, which is currently estimated at 305 million according to the US Census counter.  This means that roughly 25% of the current US population falls within the baby boomer generation. 

 What does all this mean?  First, this means the earliest baby boomers are just now reaching retirement age of 65 in 2011, and will continue to enter retirement until 2029.  Next, right now in 2009 the youngest baby boomers are still in their mid 40’s.  This means that currently a very large segment of the US population is still in the workforce.  The baby boomer generation wealth is heavily invested in various ventures such as the stock market and real estate.  Conventional wisdom with investing says in your younger years one should invest more in a risk portfolio such as stocks.  Then as we grow older we are told to move these investments to more risk adverse holdings such as bonds, notes, and securities of this nature.

 Can the incoming generation support the baby boomer retirees, and maintain a strong GDP?  The short answer would be no.  Not without massive policy changes or dramatic increases in tax collection.  Alan Greenspan said at a conference in 2005, “that we may have already committed more physical resources to the baby-boom generation in its retirement years than our economy has the capacity to deliver."  He also stated that by the time we reach 2030 it would take 2 workers to support each retiree as opposed to 3.25 for every one retiree in 2005.  Greenspan also has concerns over the amount of GDP used for health care services.

With the current state of the economy there will more than likely be a short recovery over the next two years, with stronger growth occurring in the next 5-10 years, but after that we could be in for a more devastating market condition then the ones we previously faced. 

 I am about to paraphrase an excellent quote that I heard and have no idea as to the source.  “The greatest generation made sacrifices so their children could have better lives.  This current generation (baby boomers) is making sacrifices for their children so they can have better lives”.  

Aging Stereotype

There are many groups that are typecast in this world.  The elderly group in particular is not without stereotypes.  When considering the aging stereotypes there are some that instantly come to mind.  Cognitive abilities decline, frail body conditions, loneliness, and chronic health conditions are some of the negative stereotypes.  There are positive stereotypes as well.  Not working, relaxation, traveling, and enjoying time with friends and family. 

I figured this would be a great time to ask my grandmother how she felt about some of the aforementioned stereotypes.  She told me that indeed as we age our health and quality of life is affected by chronic conditions, and debilitating illnesses.  She then told me that life is wonderful during retirement because of the freedom she has to essentially do what she wants, when she wants given there is no reason to hold her back.  My grandmother is one who stays very active constantly traveling with groups of friends to various places and enjoying different activities.  It is her believe that staying active helps to keep the mind sharp and alert.  There are things that she is not looking forward too such as when the time comes where her driving abilities will come into question. 

There are many aging stereotypes and it does appear that many of the health related stereotypes are indeed true.  Although the positive stereotypes about aging may be a little less true due to ones situation.  There is usually some truth to the elderly stereotypes out there.  

Wild Card blog 4

Today I read an interesting article titled "Will Your Next Egg Last as Long as You Do?", at Marketwatch.com

(1) http://www.marketwatch.com/news/story/Will-Your-Nest-Egg-Last/story.aspx?guid=%7BB7B5A6BD-FB85-48DE-9BB8-2CC5A556053E%7D

The article really got me thinking about my long term financial positions and what kind of costs I should anticipate for retirement.  I know that when the time comes for retirement I hope to have enough funds so too avoid outliving my savings.  That is why now during this economic downturn instead of selling, or sitting on the sidelines, I have decided to invest what I can, when I can.  I have stopped making any unnecessary purchases, and directed those funds into stocks.  The way I see it, I have 20-30 years to ride the profit wave up from historic lows.

The marketwatch article provided some examples of  high vs. low vs. national average cost of living in retirement situations.

They are as follows:

In Home care: National average -- $24,375. 

Lowest, Louisiana -- $19,296.

Highest, Alaska -- $30,849

Assisted-living facility: National average -- $38,529. 

Lowest, Missouri - $25,900.

 Highest, Maine - $65,700.

Nursing home (semi-private): National average -- $66,367.

 Lowest, Texas - $37,960.

 Highest, Alaska - $161,450.

Nursing home (private facility): National average -- $74,368.

 Lowest, Louisiana - $40,241. 

Highest, Alaska - $177,634.

With todays retirement averages you can come close to a prediction of what it will cost you at the time of your desired retirement.  By using Time Value of Money and factoring in rate of inflation at 3% you can determine Net Present Value.  The example I used to calculate was 20 years from now using todays national average @ 3% rate of inflation which provided Future Cost Prediction of:

In Home Care National Avearge 20 years from now = $44, 023

Assited Living National Average 20 years from now = $69,587

Nursing Home (semi private) National Average 20 years from now = $119,866

Nursing Home (private) National Average 20 years from now = $134,306

As you can see in just 20 years time the costs jump dramatically.  And that is given the rate of inflation does not exceed 3%, which everything the treasury and fed are doing right now point to figures higher than 3% over the next couple years.

Listen to your elders; its never too early to start saving for retirement.