co-payments. There are also new options, and hence greater need for decision making, when it comes to television, Internet, and cellular phone services: all of these can take alternate forms—analog or digital, land lines or satellite—and come in complicated packages differing in cost, speed, coverage, and so on. To the extent that they use such services, but are less savvy than younger people with new technologies, these choices are likely to pose special challenges for older adults.

In addition, many older adults are compromised in the cognitive domains necessary to process new information and make decisions based on that information. Ironically, even programs designed specifically for older people, like Medicare, are becoming increasingly complicated in terms of the decisions required by participants. New proposals for private Medicare substitutes and add-ons, while offering some advantages, undermine the simplicity that was once one of Medicare’s strong points. The recent introduction of 73 different versions of Medicare drug cards underscores the problem. And the surprisingly low number of people who have signed up for these cards suggests that the choice problem may be overwhelming (Lind, 2004). Moreover, those who become sick (as, of course, the elderly do disproportionately) may face a whole new set of decisions that patients were previously rarely expected to make—between alternative drugs, procedures, doctors, and hospitals.

Older Americans not only face many new choices themselves, at a time of life when some cognitive abilities may be in decline, but also experience the brunt of the consequences of many choices made earlier in life. In future generations these consequences may be even more significant. Decisions about geographical relocations may influence closeness to family in the decades when family support is critical. Decisions about whether and when to have children will influence financial stability and social status in old age.

Perhaps nowhere, however, are the effects of early decisions more evident than for retirement savings. The most complicated and significant set of new choices results from the widespread shift from defined benefit to defined contribution retirement plans. Defined contribution plans give employees much more control over how much money to put aside and how to invest it, and inevitably result in much greater variability in retirement incomes. Proposed changes in the Social Security system would bring even more choices to workers and additional variability in retirement incomes. More than ever, older Americans’ standard of living in retirement will depend on choices they made when they were working—choices that most economists agree are far from optimal and have led to severely suboptimal levels of retirement saving for the population as a whole. Unless significant changes occur, it is very likely that large numbers of older Americans will be facing difficult choices of how much to spend from what is likely to be a

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