Healthcare costs – not grandchildren gone wild – the top retiree concern

By Clive Riddle, August 17, 2018

What’s the top concern about retirement years voiced by retirees as well as retirement plan sponsors? Its not grandchildren gone wild, keeping up with new technology, staying ahead of future inflation, or even staying in good health. Instead, its paying for that health.

Results just released from the 2018 TIAA Plan Sponsor Survey of 1,001 plans sponsors from nonprofit and for-profit organizations found that 91% of plan sponsors believe that healthcare costs are the most significant retirement security issue today. 54% answered very significant and 26% said somewhat significant, while 2% were neutral and – the plan sponsors I’m curious about: 3% said not at all significant.) After health care at 91%, the next highest concern of the top six: Ensuring employees are prepared to retire on a timely basis total 81% saying it was very or somewhat significant.

Meanwhile, another new survey tells us even affluent retirees are plenty scared about those retirement costs. A new Nationwide Retirement Institute survey of adults age 50+ with household income exceeding $150k, conducted by the Harris Poll indicates that 73% of affluent, older adults “list out-of-control health care costs as one of their top fears in retirement and 64 percent of future retirees say they are ‘terrified’ of what health care costs may do to their retirement plans.”

Here’s more of Nationwide’s survey findings:

•  72% wish they better understood Medicare coverage
•  42% admit they would give away all their money to their children so they could be eligible for Medicaid-funded long-term care.
•  53% do not know that Medicare Part B is not free even if you have worked and paid Social Security taxes for at least 10 years
•  23% do not know you cannot enroll in Medicare at any time
•  29% do not know Medicare does not cost the same for everyone
•  62% do not know that future changes will impact the ability to sign up for Medigap/Medicare supplement   plans
•  53% are unsure or can't estimate what their annual health care will be
•  65% are unsure what their long-term care costs will be
•  27% of even these affluent, older adults say they couldn't cover more than $1,000 in unplanned expenses:   44% couldn't cover more than $4,000 and 60%couldn't cover more than $5,000 of unplanned expenses
•  50 % have access to a Health Savings Account (HSA) through their employer, with 30% participating in or   contributing to the HSA