Two new studies amplify the benefits—especially for women—of working with financial advisors, and provide insight into a changing demographic for life insurers.
Women approaching their retirement estimate they will spend $4,624 beyond what Medicare covers each year on health care for premiums, co-payments and deductibles, according to a Harris Interactive survey of 1,250 Americans more than $250,000 in household assets. Men estimate an average of $5,882; however, a 65-year-old couple would need an estimated $240,000 to cover medical expenses during their retirement years, plus long-term care costs.
“The fact is women live longer than men, which means they will spend more time in retirement and that places women at a greater risk of outliving their retirement assets,” said John Carter, president of sales and distribution for Nationwide Financial. “It also may increase their chances of incurring long-term care costs during their golden years. That’s why it’s especially important for women to plan for health care costs in retirement.”
Exacerbating the issue of under preparedness is the fact that, on average, women live longer than men and the income gap between men and women. Disparities in income have resulted in a retirement savings shortfall of 25 to 30 percent compared to men, according to the Insured Retirement Institute (IRI).
The Harris survey further notes women are more likely to be left needing care, as there is a 70 percent chance that a woman 75-years or older will be widowed, divorced or unmarried, compared to just 30 of men who are alone at that age for those reasons.
"Due to persisting income disparities, a retirement income glass ceiling has been placed over women, and it is limiting their ability to fund a secure retirement," said Cathy Weatherford, IRI president and CEO. "But by working with a financial advisor, women can break through this barrier by developing a holistic retirement strategy that includes additional sources of retirement income."
According to the Harris survey, half of retirees claim to be ‘terrified’ of the potential cost of health care and its impact on their retirement savings, however there is pervasive ignorance about the actual costs of care and how much they should expect Medicare to cover. Women estimate Medicare will cover 65 percent of their health-care costs, but according to the survey, 85 percent said they guessed or didn’t know, just 2 percent said that a financial advisor told them. Further, 46 percent of women, and 39 percent of men, said they were somewhat or not at all confident in their plan to live comfortably in their retirement years.
Register or login for access to this item and much more
All Digital Insurance content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access