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Posts Tagged ‘Costs’

Americans are deeply unhappy with the country’s health care programs and costs. And rightly so. As one author observed, “A recent survey showed that only 17 percent of respondents in the United States were content with their health-care system . . . Why the discontent? The superficial reasons are simple enough to describe: the system is hugely expensive, very bureaucratic, and extremely patchy. The expenses first: U.S. health care costs a third more, per person, than that of the closest rival, superrich Switzerland, and twice what many European countries spend. The United States government alone spends more per person than the combination of public and private expenditure in Britain, despite the fact that the British government provides free health care for all residents.”

The United States pays more for health care per capita than any other industrialized nation — and even then, Medicare is not a comprehensive, pay-for-everything national health program like those of many nations and United States per capita health care costs continue to escalate rapidly.

Here’s what you need to know about health care costs as you plan for retirement.

Americans age sixty-five and over spend four times more on health care on average than do Americans under the age of sixty-five. At the outset of this decade, the average per capita health-care outlay for a person under the age of sixty-file was about ,800. For people over the age of sixty-five, it was ,089. And for Americans ages eighty-five and older it was ,001. Clearly, health care outlays are likely to get substantially larger as you age. You need to plan for them.

U.S. health care expenses have grown mightily. U.S. health care expenses have dramatically escalated each year as new medications, new treatments, diagnostic tools, and health care innovations have come onto the market.

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For example, the median nationwide cost for a hospital stay — excluding physicians charges — was ,280 in 1997; by 2004 it was almost double at ,455. The average total cost for treating a heart attack climbed 40 percent in just seven years. All in, health care costs have escalated fast and the increases are gaining momentum.

Health care costs are likely to continue to grow unabated. Unlike in other countries, no laws meaningfully curb the continual climb of health care and drug costs in the United States. For example, many Americans continue to import drugs from Canada because Canadian prices are significantly lower. This is true even though the new Medicare Features introduced in 2006 offset the cost of pharmaceuticals for U.S. retirees. To curb the cost of medicines, Canada prohibits drug companies from advertising on its television channels. In the United States, on the other hand, the very legislation that created the new Medicare drug benefit (Part D) expressly prohibits the federal government from attempting to negotiate lower prices with drug companies.

Count on it: medical costs are sky-high and likely to keep climbing unless there is a radical overhaul of the system.

More and more corporations are cutting back on health care benefits as medical costs soar. Recent statistics show companies cutting health care benefits and requiring employees and retirees to pay more for them. As one survey of corporate benefit trends concluded, “[Benefit] reductions have become not just common, but expected, with the only question now being of how much more of a reduction in benefits and or an increase in cost will be directly placed on individuals . . . In the end . . . individuals, either as taxpayers or consumers, will need to pay the bill.

I believe this trend will gain greater momentum over the next decades. It will be part and parcel of the continuing erosion of employment benefits — like the demise of traditional pensions — that is taking place throughout the country. Just like pensions, more and more health-care expense is going to become a do-it-yourself responsibility because heath care insurance costs are simply becoming too great for companies to shoulder competitively.

Taken all together, you can count on: (1) higher and higher health care costs, (2) more health-care-benefit cutbacks by U.S. employers, (3) the need to factor large health-care expenses into your funding plans, and (4) the need to buy supplemental health-care insurance to shield your savings from cost attack.

Of course, these views will not come as a surprise to most folks. Recent polls show that — immediately after the foremost financial concern of having enough money for retirement — the next great concern of most Americans is health care. More than half of adult Americans are “very worried” or “moderately worried” about being able to pay for serious illness or catastrophic health-care expense.

Copyright © 2008 by Jim Schlagheck

The above is an excerpt from the book Cash-Rich Retirement

by Jim Schlagheck

Published by St. Martin’s Press; March 2008;.95US/.00CAN; 978-0-312-37740-3

Copyright © 2008 by Jim Schlagheck

Author

Jim Schlagheck is an author, banker, longtime advisor to the ultrawealthy, and the coproducer of the public television series Retirement Revolution. He has written numerous articles on investing, retirement, and finance, and is also an acclaimed speaker who describes better ways for retirement readiness to audiences of wealth-management professionals and lay investors nationwide.

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It is critical to have a clear indication of restaurant start up costs before you dive in and put your capital on the line. You really have to have access to over $100,000 in funding to start up in the restaurant business and possibly more than this depending on the concept that you have in mind.

Many restaurant owners run out of cash during the first year of their restaurants existence and are forced to close down due to the sad reality that they were not able to get to profitability as rapidly as they thought. Keeping enough funding in reserve to prepare for a worst case scenario is prudent.

Firstly you should not let anyone talk you into the most recent equipment or furnishings. Purchase just what you require and get more as you slowly grow your business. Shop around for deals on the internet or at auctions.

The main expenses are to do with getting set up in a suitable place for your restaurant. Costs can vary considerably here depending on if you , buy or even build your own place from scratch. Then you will have refurbishment expenses in addition to continuing utility costs to think about.

Restaurant location is one of the most important factors contributing towards success so you might want to do some extensive investigation, or hire someone to do it to make sure that you find the right area and the right concept for that location.

Your state will have health, business and zoning rules and you have to get an accurate idea of what these entail so that you can put aside cash for permits and other paperwork.

Your restaurant will need to have liability insurance as well as a general policy to protect you against losses or damage to your restaurant property. Figure in health and safety equipment too like fire extinguishers.

You will have to fully equip a commercial kitchen. Once you understand more about the seating capacity and the menu that you intend to provide you can seek out advice from a chef regarding equipment requirements.

Your restaurant kitchen will also need to obtain everything that is required to run a fully functioning dining room, from chairs and cutlery to linens.

Many systems can be installed in restaurants nowadays to control and protect inventory and avoid stealing, to accurately take and communicate orders and to collect takings and maintain accurate records. Systems like this can be costly to get set up but can help you to be more efficient and productive.

You need to design a brand and work this in with your theme, on exterior signs and on menus and on business cards and other materials. Advertising is also essential and you need to allocate a substantial sum for this to build up some good exposure.

Go out to have a meal at a restaurant and take a glance around and you will be surprised at how there are so many little items and expenses that you would never consider.

Restaurant start up costs are closely related to location, seating capacity and theme as well as the market that you are catering to. There are opportunities for all budgets ranging from low six figures and above.

Most new restaurants will come across a slow patch at first when income doesn\’t match up to owner expectations. It is important to distinguish start up costs from operating expenses and allow yourself to have funds on hand to get through the difficult times before passing break even point.

Set out a plan for financing your new restaurant venture, carefully budget your seed capital and make sure that you have emergency funding sources if needed.

Get your business off to a great start by ensuring that you are fully aware of all the restaurant startup costs that you will be facing and by making sure that you have a strategy in place to allow for them.

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American healthcare spending reached $2.4 trillion in 2008—and will exceed $4 trillion by 2018, with costs soaring at two to three times the rate of inflation.

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