Thread by @biggsag

I'm the optimist when it comes to retirement security. In fact, I wrote an entire book claiming the so-called "retirement crisis" is false.

But did I forget something major? /1 @aeiecon
amazon.com/Real-Retiremen…

A new @MorningstarInc report argues that the optimistic picture of retirement incomes looks plausible when you ignore long-term care costs, such as nursing homes.

But when long-term care costs are counted, the familiar retirement crisis story reappears./2
morningstar.com/business/insig…

@MorningstarInc The Morningstar report explores 2 scenarios:

First, where LTC costs aren't counted. In that case, just 26% of seniors are projected to run short of money in retirement. /3

@MorningstarInc But in the second, when long-term care costs are factored in, 41% of retiree households run out of cash.

The retirement crisis is back! /4

@MorningstarInc But that's not really what Morningstar is doing.

They're not contrasting a situation in which seniors have no long-term care costs to a realistic scenario that factors such costs in. /5

@MorningstarInc Rather, they assume that retirees must pay ALL long-term care costs out of pocket.

So no Medicaid, no Medicare, no private insurance, no state programs, no charity, no nothing. Retirees pay everything. /6

@MorningstarInc But that's not the real world. In 2021, only 14% of long-term care costs were paid out of pocket. The rest came from other sources.

So Morningstar's scenario which includes long-term care also implicitly EXcludes providers that currently pay 86% of total LTC costs. /7

@MorningstarInc This raises long-term care costs in retirement for everyone, but especially for low-income seniors. The idea that they have to pay full-freight when in fact Medicaid will cover most LTC costs doesn't make sense. /8

@MorningstarInc All of this is of a pattern with studies claiming to find there's a retirement crisis: there's also some string that, if tugged upon, pulls the whole study apart.

I wrote about these other studies in the Journal of Retirement. Check it out here: /9cdn.ymaws.com/dciia.org/reso…

@MorningstarInc And if you want to understand the Morningstar LTC study better, I wrote about in more detail here:
littleknownfacts.substack.com/p/no-long-term…