Despite the rising costs of health care and the hits many retirement accounts took from the recession, a Nationwide Financial survey1 reveals 9 in 10 retirees with at least $250,000 in household assets are not concerned about paying for their future health care costs.
Retirees and baby boomers have differing opinions, according to the survey conducted by Harris Interactive1 in January 2012:
- 90% of retirees say they are confident they can pay for their future health care costs
- Nearly half of baby boomers nearing retirement say they are “terrified” of health care costs
One of the reasons retirees are confident in their ability to pay for health care costs may be that they are already doing it successfully. Also, many current retirees have pensions and employer-paid health care − a luxury most boomers nearing retirement may not have.
Also, baby boomers are facing numerous concerns as they approach retirement, including:
- They expect health care to be one of their biggest expenses
- They are not planning for inflation
- There is a looming risk of incurring exceptionally large health care expenses
Retirees need guidance
Almost 40% of retirees want to understand Medicare coverage better, but few consider talking with their financial advisor about ways to handle health care costs in retirement.
There are many ways an advisor can help:
- They can reassess how rapidly to draw down your wealth during retirement
- They can do regular health care costs assessments to factor in inflation or any changes in your health
- They can suggest additional options for paying for health care costs in retirement