The rising cost of health care is one of the most serious and complex issues facing society.1 Yet when it comes to planning for those potential costs in retirement, it's a conversation a lot of people aren't having.
Preparing for health care costs: now’s the time
Health care could actually be one of your biggest retirement expenses. Private insurance and Medicare will help, but you may still be stuck with a lot of out-of-pocket health care costs. For most people, Medicare only covers about half of total health care costs.2 Also, the higher your income, the higher your Medicare premiums3 – and in general, it doesn’t even cover long-term care.3
A good strategy can help you take control of these potential costs. Learn more about health care in retirement and work with your financial advisor to create a plan for medical costs so you're prepared. More flexibility, less anxiety. Just what the doctor ordered.
Kicking the can down the road?
Based on the Nationwide Retirement Institute,4 American workers are “terrified” of health care costs in retirement – yet few are currently doing anything to prepare for these costs. (You can view the survey results for yourself.)
John Carter, president and chief operating officer of Retirement Plans for Nationwide, said the Harris Poll of over 1,300 U.S. adults age 50 and older found that 69% of affluent pre-retirees list soaring retirement health care costs as their #1 fear.
Some 59% are afraid they'll become a burden to their families as they get older. Yet, 52% haven't discussed these concerns with their spouse, children or financial advisor.
Starting a health care discussion
As you begin to think about possible future health care costs, it’s good to have candid conversations with the people involved in your physical and financial well-being:
- Talk to your doctor - Get regular checkups and stay on top of your blood pressure, cholesterol, glucose, BMI and so forth. Remember that old saying about “an ounce of prevention?” It’s still true.
- Talk to your family - Discuss potential health-related expenses that may impact your retirement. Speak honestly about the future care you wish to receive in case you’re incapacitated. This can save a whole lot of angst and confusion later on.
- Talk to your employer - Talk to your employer about health, savings and retirement benefits they may offer, as well as health coaching or wellness programs. Also, find out if any health benefits will continue to be available after you retire.
- Talk to an investment professional - Meet with an expert who can help you address medical expenses in retirement by offering products and strategies that could better prepare you.
A family affair
More of survey’s findings serve to underscore how health care is really a family issue:4
- 51% of adults are worried they will become a burden to their family as they get older (51 percent), but over three in five (62%) say they would rather die than live in a nursing home.
- 45% of older adults have not discussed with anyone, despite the overwhelming concerns about health care issues.
- 50% haven’t talked with their spouse about health care.
- 81% haven’t talked to their children about their plan to address health care needs in retirement, most often because they don’t want to worry them.
What to do about it
Plan to address health care costs in retirement by meeting with a financial advisor. They can help you prepare a Nationwide Personalized Health Care Cost Assessment, work with you to estimate your future health care and long-term care costs, and help you explore solutions.