Deals & People May 9, 2012

MassMutual Retirement Adds National Practice Leader to Sales Team

Doug DeNigris was named MassMutual Retirement Services Division’s national practice leader for the Taft-Hartley market segment. 
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In this newly created role, DeNigris is responsible for the strategic development of MassMutual’s Taft-Hartley business by partnering with internal departments, advisers and consultants on new business opportunities, technology, products and services for Taft-Hartley plans. He brings more than 14 years of experience in this space, most recently serving as Taft-Hartley business leader at Mercer.

“Doug is highly regarded in the Taft-Hartley market and has built strong relationships with retirement plan advisers, consultants and sponsors over the years,” said Scott Buffington, vice president and national sales manager for MassMutual’s Retirement Services Division.

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DeNigris is based in MassMutual’s Springfield, Massachusetts, headquarters and reports to Jonathan Shuman, vice president, head of intermediary, market and channel development for MassMutual’s Retirement Services Division.

 

Data & Research May 9, 2012

Health Care Costs Could Consume Retiree’s Income

Households relying on Social Security benefits to cover health care costs should expect medical bills to consume 61% of their Social Security payments by 2027.  
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According to Fidelity Investments, a 65-year-old couple retiring in 2012 is estimated to need $240,000 to cover medical expenses throughout retirement. This represents a 4% increase from last year, when the estimate was $230,000.

Fidelity has calculated an annual estimate of medical expenses for retirees for more than a decade. For many Americans, health care is likely to be among their largest expenses in retirement. The estimate, which is calculated by Fidelity’s Benefits Consulting business, does not include any costs associated with nursing home care and applies to retirees with traditional Medicare insurance coverage.

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The estimate has increased an average of 6% annually since Fidelity’s initial calculation of $160,000 in 2002, with the exception of 2011 when the estimate declined $20,000. That one and only decrease in the history of the estimate was due to a one-time adjustment driven by Medicare changes that reduced out-of-pocket expenses for prescription drugs for many seniors. This year, health care expenses are rising once again.

“Today’s workers must understand that the cost of health care is expected to continue rising significantly in future years,” said Brad Kimler, executive vice president of Fidelity’s Benefits Consulting business.

 

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“Medical inflation is outpacing salary increases and cost of living adjustments for many people. Until that situation changes, it is critical that individuals include health care costs in their retirement savings strategies today so they can be prepared to pay their medical bills throughout retirement,” Kimler said.

Many retirees rely on Social Security benefits as their primary source of income. For a 65-year-old couple retiring this year on a $75,000 annual household income, annual Social Security payments will be approximately $29,970.

Fidelity compared Social Security’s average cost of living adjustment (2.3%) against an assumed average annual increase of health care costs for retirees nationally (6%). The comparison found that 65-year-old couples retiring this year with a $75,000 household income should expect 35% of their annual benefit (about $10,476) could be needed for health care expenses today. In 15 years or by 2027, their allocation of Social Security benefits going toward health care expenses is likely to almost double, to 61% of a $41,205 annual Social Security payment, or about $25,000 a year.

 

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