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Will healthcare undermine your clients’ retirement strategy?

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Affluent Americans are concerned about the impact of healthcare costs on retirement

According to a new study published by Nationwide, healthcare costs are a major concern as adults age, and six in ten affluent Americans surveyed are “terrified” of how healthcare costs may derail their retirement plans.

These consumers are right to be concerned about these costs in retirement – expenses are expected to top $280,000 in retirement, according to a 2018 estimate by Fidelity Investments.

More than half of the respondents surveyed by Nationwide said they are concerned about not having the money they need to cover unplanned medical expenses in retirement, and Nationwide confirms many Americans are already unable to handle unexpected healthcare costs.

Part B premiums

According to a 2018 Nationwide Retirement Institute Survey, more than half of respondents did not know that Medicare Part B is not free. Even if you have worked and paid Social Security taxes, there are premiums associated with this coverage. Clients with higher incomes may pay up to $460.50 per month in Part B premiums. This is one reason why finding the right Medicare strategy is so important.

Long-term care

Long-term care, including nursing homes or assisted living facilities, are not covered by Medicare. Some consumers find it valuable to obtain long-term care insurance coverage to protect their retirement savings in case long-term care is needed.

Out-of-network bills

Depending on the Medicare strategy chosen by your clients, it is possible that their insurance coverage includes networks, or a list of hospitals and doctors that take their insurance. In the event that a client visits an out-of-network hospital, their Medicare plan may cover less or none of the bill. Depending on the acuity of the healthcare experience, these bills could be high.

To help clients avoid these surprise costs, many financial advisors are partnering with Bernard Health to offer a Healthcare Extension. To learn more about the Healthcare Extension, click below.

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