Crisis for the very old: outliving their assets

From the LATimes.com:

As if you haven't been scared enough by the projections that most Americans haven't saved enough to maintain their lifestyles as they enter retirement, here's something even more terrifying:

Nearly half of all Americans will outlive their assets, dying with practically no money at all.

Even more worrisome, that's true even among households that met the traditional standards for secure retirement income. Economic factors and changes in employer pensions and in economic reality have made it much harder to stretch income and assets so they last, especially as people live longer....

Americans ages 75 and older lost one-third of their household financial assets and one-sixth of their net worth from 2007 to 2010, reflecting the devastation of the 2008 crash. Their balance sheets may have improved since then, but obviously they have less time than other age groups to make up the losses.

The 75-plus generation is struggling more than others to keep up....

Economist James Poterba of MIT put it all together with colleagues at Dartmouth and Harvard's Kennedy School and estimated that about 46% of Americans die with less than $10,000 in assets, many of them lacking even home equity and relying almost entirely on Social Security.

The results can be measured in more than merely dollars and cents. Poterba's paper found that this group is "disproportionately in poor health," in part because they have no resources to cover medical expenses outside Medicare.

Most shocking, many of these households were considered to have entered retirement in good financial shape; they didn't count on outliving their plans....
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Link: http://www.latimes.com/business/la-fi-hiltzik-20130717,0,2211926.column