SURVEY SAYS: Health Care Costs in Retirement

Last week, we asked NewsDash readers, “Are you concerned about being able to pay health care costs in retirement?”
By PS

Among respondents to last week’s survey, more than two-thirds (67.6%) are plan sponsors, 11.8% are advisers or consultants, and 20.6% work for TPAs, recordkeepers or investment managers.

The vast majority of responding readers (85.7%) said yes, they are concerned about being able to pay health care costs in retirement. Nearly 9% said they are not concerned, and 5.7% are not sure.               

Asked if their company has provided education or communication to its retirement plan participants about their estimated health care costs in retirement, more than four in 10 (42.9%) said no. Twenty percent each said their company has educated or communicated directly and through its recordkeeper.

More than 11% each indicated their firm has educated or communicated health care cost estimates to participants through its adviser and through another source. More than 8% said they are not sure.

Among the few respondents who chose to leave verbatim comments, a couple expressed concerns for themselves and about educating participants. There were explanations about how the cost of health care is addressed with participants, and one reader suggested projections of health care costs in retirement are not very useful. There is no Editor’s Choice this week.

A big thank you to all who participated in our survey! 

Verbatim 

This is a challenging topic. The future of our retiree medical plan is unknown, so it's not really spoken about. But, we do our employees a disservice to ignore it!

I think many of our participants are, like myself, not prepared for the reality of health care expenses in retirement. I keep hoping I will stay as healthy as I am today for the next 25 years, then just go to sleep one night and not wake up. On a more serious note, there is something seriously wrong with a system of medical care that is based on profits to corporations and insurance companies instead of on the well-being of patients. Our money would be well spent towards eradicating that system! Okay...stepping down from my soapbox...

In 401k plan meeting, employees are reminded that not only should they save for retirement but there is the added cost of health care as we grow older. In health care open enrollment meeting, the cost factor of health care is communicated.

We publish an article annually in our benefits newsletter about the need to save for health expenses even if one is covered by Medicare. Highly paid participants (law firm partners) can expect to pay more. Fully fund your HSA now and don't use it for minor current expenses!

Managed health care means that I manage the process for my personal health care and I am not an expert in these matters. I find the management process expensive, cumbersome, frustrating and tiresome.

Gee, if you think health care is expensive now wait until it's free.

the projections of "average" health care costs in retirement are about as useful as those "average" 401k balances. Which is to say, "not very." We just try to make sure that when people think about retirement expenses, they're also thinking about health care costs. Or we just remind them that they won't have to worry because of Obamacare... (wink, wink)

 

NOTE: Responses reflect the opinions of individual readers and not necessarily the stance of Asset International or its affiliates.

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