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May 07, 2012 at 08:49 AM
Nearly half of soon-to-be-retired, high-net-worth boomers are concerned about the negative impact of healthcare costs on their retirement plans, new research reveals.
Nationwide Financial, Columbus, Ohio, published this finding in a summary of results from an online poll of 625 adults ages 55-plus having $250,000 or more in household assets who plan to retire by 2020; and of 625 retired adults ages 65-plus having $250,000 or more in household assets. The survey was conducted for Nationwide by Harris Interactive Jan. 3-19, 2012.
Nearly three in four of the survey respondents say that “out of control” health care costs are among their top retirement fears. Yet, nearly 4 in 10 respondents (38%) nearing retirement say they have not discussed retirement with a financial advisor. Of those who have, only one in five discussed health care costs in retirement not covered by Medicare.
“Americans—even those who have diligently saved for their golden years—are not prepared for the reality of health care costs in retirement and don’t really understand how Medicare works,” said John Carter, president of Nationwide Financial Distributors, Inc. “Too many assume their employers will continue to pay their premiums during retirement or that Medicare will cover all health care expenses.”
The survey notes that soon-to-be-retirees lack confidence in the ability of financial advisors to help with this challenge, with three in five (59%) saying that most financial advisors are not equipped to discuss retirement health care costs with their clients. But those who have broached this topic with a financial advisor indicated that it was worthwhile, with two-thirds saying advisors were “helpful” or “very helpful” in discussing information about their health and estimating their health care costs in retirement.
Only one in five respondents say they are confident in their knowledge of Medicare coverage. And more than half say it is very or extremely important they educate themselves on Medicare coverage when planning for retirement.
Soon-to-be-retired Americans who plan to enroll in Medicare estimate that Medicare will pay for 68% of their health care costs in retirement. But when asked how they arrived at that percentage, nearly three in four guessed or didn’t know, 15% calculated it based on their own research, 7% spoke with friends who have already retired and just 4% say they were told by their financial advisor.
