Pete Buttigieg has a big new plan to shake up the retirement system Ben Werschkul

[applegrove]

https://finance.yahoo.com/news/pete-buttigieg-retirement-plan-110045918.html

Pete Buttigieg has a big new plan to shake up the retirement system

Ben Werschkul

November 25, 2019, 6:00 AM EST

Earlier this year, Pete Buttigieg, the 37-year-old mayor of South Bend, Indiana, noted on the presidential campaign trail, “I know I’m the young guy in the race but retirement is on my mind a lot.”

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Here’s how it works: every retiree who needs help “with two or more activities of daily living” would get $90 a day to defray the costs of long term care after some waiting periods based on income. The benefit could be used for things like hiring a home health aide or paying for a nursing home.

The current average Social Security benefit is $1,471 per month. This program, at $90 a day, would be a benefit worth almost double that for the much smaller number of eligible seniors.

The total cost of the plan is unclear. A plan summary notes that 11.3 million people who are currently over 65 will receive benefits from the program at some point in their life. Research cited by the campaign notes that among people who receive long-term care “most will need assistance for less than two years.” The costs of the program would be paid for by greater tax enforcement on the wealthy.

The plan has a range of inducements to encourage seniors to stay at home for their care. That is a feature that Nancy Altman, president of a group called Social Security Works, thinks will help defray some of the cost. "There really are incentives for people to stay at home, as opposed to, the immediate default is spend down, go on Medicaid, and go into an institution," she says adding that currently there is an "unintended bias in the current law towards institutional care.”

In-home care, even for 8 hours a day, tends to cost substantially less (and tax the health care system less) than moving full-time into an assisted living facility. 

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