"So, how much do you have saved for retirement?" Does reading that question make you feel a little anxious?
If so, you are not alone. A Nationwide Retirement Institute (NRI) survey found that more than seven in 10 Americans nearing retirement say they are “terrified” of what healthcare costs may do to their retirement plans.
There's reason for such concern. Paying for healthcare can be one of the largest expenses for people in retirement, and those costs are increasing year-over-year. According to Fidelity’s Retiree Health Care Cost Estimate:
- A 65-year-old couple retiring in 2016 would need an estimated $260,000 to cover healthcare costs in retirement—a six percent increase over the estimate for 2015.
Despite being genuinely "terrified", individuals aren't speaking up. The same NRI survey revealed that despite overwhelming concerns about care, half of older adults have not discussed healthcare costs with anyone — even those closest to them.
- Half of married adults haven't talked to their spouses about plans to address healthcare needs in retirement.
- Eight in 10 adults haven’t talked to their children about their plans, even though family members (typically, children) are the first line of defense for financial help.
- Fifty-seven percent of adults with a financial adviser haven’t talked to their adviser about healthcare costs.
Making our readers uneasy isn't our goal—we simply want to illustrate that the thought of retirement finances can make people uncomfortable, but there steps you can take now to help ease your concerns. Start talking to your loved ones about where you are today with retirement planning, where you want to be and how to get there. You can also talk to your employer about available healthcare savings options. If you are enrolled in a high-deductible health plan, ask if your company has a Health Savings Account (HSA) program, which allows you to contribute, invest and save pre-tax dollars that can be used to pay for out-of-pocket, eligible healthcare costs both now and down the road during retirement.
Retirement is inevitable, as are out-of-pocket medical costs. Give yourself some peace of mind and start planning today.
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