Nearly half of soon-to-be-retired, high-net-worth Americans say they are terrified of what health care costs may do to their retirement plans, according to a new survey.
A second study of retirees 65 years and older conducted by
“These concerns are completely justifiable as managing health care costs remains a major financial challenge during retirement,”
Nationwide reported that pre-retirees who plan to enroll in Medicare estimated that Medicare will pay 68 percent 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.
While Medicare provides health coverage to 46 million older or disabled Americans, the government program currently covers only about 51 percent of the expenses associated with health care services, according to the
On average, a healthy 65-year-old man can expect cumulative health care costs including premiums to reach $369,000 through the remainder of his life, according to IRI research. For a woman, the cost is estimated at about $417,000.
“Insurers and the financial planning community can work with Boomers to deploy strategies that can significantly reduce the total investment needed,” said Weatherford. “IRI’s research shows that by purchasing an annuity with a guaranteed minimum withdrawal benefit, a 55-year-old male has the potential to reduce the initial investment by more than 70 percent.”