While the Supreme Court decided to uphold the Affordable Care Act, a study from Nationwide Financial found that the difficulty of judging how much to save for health care in retirement continues even after Americans stop working.
Fully 90% of retired respondents said they are confident they can cover future health costs, compared with half of pre-retired baby boomers with the same amount of assets who said they were “terrified” of what health care costs could do to their retirement plans.
In January, Harris Interactive surveyed 625 retired people 65 and older and 625 people 55 and older who planned to retire by 2020. Nationwide released a portion of the survey on May 7, and followed up on June 25 with the most recent release.
The Act “doesn’t change anything,” John Carter (left), president of distribution and sales for Nationwide Financial, told AdvisorOne on Monday. “Individuals still need to work with their advisors to adequately prepare.”
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For the 60 million boomers who will begin retiring over the next 16 years, Carter said, that means planning for a retirement that isn’t supported by generous pensions. “We don’t believe corporate benefits will be richer. We don’t believe Medicare will be richer.”
Just 21% of retirees say health care is their biggest cost, compared with 40% who cite housing as their biggest expense, the most common response. On average, retirees estimate they spend $4,083 per year on premiums, copayments and deductibles. However, 21% say they spend less than $1,499 every year, and 22% don’t know how much they spend.