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Researchers long have been sounding the alarm that Americans arent saving enough for retirement. Now, it seems, rising costs mean that even the most diligent of savers are at risk of not having enough.

A new report from the National Institute on Retirement Security, a nonprofit research institute, finds that increasing costs for housing, health care, and long-term care are major burdens for seniors across the wealth spectrum. Heres a rundown of the reports findings on those three major expenses, along with some policy recommendations from NIRS.

Housing: Older Americans are the group most likely to own a home, but 46% are carrying mortgage debt into retirement, up from 24% three decades ago, according to the NIRS report, which cites research from the Harvard Joint Center for Housing Studies.

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Tyler Bond, research manager for NIRS, said many seniors likely are still paying off their mortgages because they took advantage of historically low interest rates to refinance their homes. Still, he said, its concerning that nearly twice as many seniors are carrying mortgage debt into retirement as they did 30 years ago, suggesting that money is tighter for todays seniors.

Another concern is that fewer seniors own a home today than a decade ago, and that downward trend is likely to continue because Americans who are nearing retirement are less likely to own a home than current retirees, the report says. The percentage of seniors who own a home peaked at 81% in 2012 but has dropped to about 78.5% today, according to the report.

In addition, the number of seniors considered cost-burdened by housing, meaning more than 30% of their income goes toward housing, reached 10 million in 2017, an increase of 200,000 from the prior year, the report says. Of that group, almost 5 million were severely burdened, spending more than half their income on housing.

The lack of affordable housing is a major concern nationwide, the report says, but high rents are particularly burdensome for seniors living on fixed incomes. Women tend to live longer than men, and older adults are more likely to live alone, so senior women often bear housing costs entirely on their own, frequently with a reduced income due to the death of a spouse, the report says.

This means there is a serious need for affordable housing for the oldest Americans, who are disproportionately women, and this need will grow in the coming decades as the number of much older Americans increases, the report says.

Health care: The report, citing research from Fidelity Investments, notes that a 65-year-old couple retiring in 2019 can expect to spend about $285,000 on health care in retirement. That figure includes Medicare premiums, co-pays, and prescription drugs, but doesnt include dental, vision, or long-term care.

About half of all Medicare beneficiaries spend at least 12% of their income on health care, according to the report, which cites research from the Kaiser Family Foundation, and health-care costs continue to rise.

Long-term care: With seniors living longer and baby boomers retiring, NIRS said it expects more Americans to need long-term care such as a home health aide or a nursing home, and those costs likely will continue to rise. Senior citizens today have an almost 70% chance of needing long-term care at some point, the report says, citing data from the U.S. Department of Health and Human Services.

About 10% of retirees will spend three years or more in a nursing home, with total costs typically exceeding $300,000 over that time, according to the report, which cites research from the Genworth Cost of Care Survey. That figure dwarfs the median retirement savings of workers ages 55 to 64, which is about $88,000, the report says.

To address the gap, NIRS outlines a number of possible remedies, including expanding Social Security benefits and allowing retirees to purchase annuities through the Social Security Administration.

The report also highlights the Long-Term Care Trust Act in Washington state, the first state-operated long-term-care insurance program. The 2019 law establishes a payroll tax on employees of 0.58% to provide long-term-care benefits of up to $36,500 per senior.

The state is scheduled to begin collecting the tax in 2022 and to start paying benefits in 2025. Since Medicaid is the largest payer of long-term-care costs in the nation, Washington state expects to see its Medicaid costs reduced due to this law, Bond says.

That lifetime cap of $36,500 may seem like a small amount of money, especially with some people facing these astronomical amounts for long-term care, he says. But I think its important to keep in mind that a lot of seniors wont need the most expensive forms of long-term care, and so that amount from the Washington trust fund can go a long way for those seniors who have more manageable long-term care needs.

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Even Seniors Who Are Good Savers Stand to Fall Short in Retirement, Report Concludes - Barron's