Health care costs — if not properly accounted for — could derail even the most solid retirement plan, according to new research from RBC Wealth Management.
RBC Wealth Management recently commissioned a survey to shed light on perceptions of health care in retirement for its new report, Taking Control of Health Care in Retirement. The study included more than 1,000 individuals across diverse demographic categories, including those still in primary careers as well as retirees.
According to the study, 80% of Americans surveyed are worried about funding the cost of health care as they age, but only 56% have actually factored health care into their retirement plan.
The study also finds that overall health care costs are being underestimated by investors.
“Many [investors] don’t believe that they’ve saved enough,” Ann Senne, head of RBC Wealth Management’s U.S. Advice and Solutions Group, told ThinkAdvisor. “And when they start to look at the numbers that they actually need, and you look at the facts, it’s probably twice what they think it is.”
Investors in the survey anticipate relatively modest annual out-of-pocket health care spending in retirement. Around $2,700 is the average expected annual out-of-pocket spend on health care, according to the survey.
In reality, experts estimate that at age 65, annual spend on health care for a healthy couple is close to $5,700 per person ($11,400 for a married couple), according to RBC.