Through the partnership, the IRI offers its member firms access to HealthView Prime, a retirement health care cost planning tool customized for financial advisers. The tool is designed to facilitate the integration of retirement health care cost considerations into retirement planning decisions.
“Incorporating future health care costs into Americans’ retirement plans is essential to helping them financially prepare for their later years,” explains Cathy Weatherford, IRI president and chief executive officer. “Until recently, advisers weren’t always able to provide retirement health care data for individual clients, creating a retirement health care cost planning gap.”
The individualized retirement health care cost data that HealthView Prime provides will be a powerful tool to help advisers drive informed retirement planning decisions, she adds.
According to HealthView Service’s recently launched Retirement Health Care Cost Index, an average healthy couple retiring next year will spend 69% of their total lifetime Social Security benefits, or $366,599 in today’s dollars, on health care in retirement. In another 10 years, costs will rise to 98% of total lifetime Social Security benefits, or $421,083.
For couples retiring in 20 years, as much as 127% of Social Security benefits will be required to cover health care costs, and couples retiring in 32 years will need 190% of their Social Security benefits to cover health care costs, barring substantial reforms to the federal safety net program (see “Health Care Costs Will Exceed Social Security Benefits”).
“Retirement health care costs are the elephant in the room when it comes to retirement planning,” says Ron Mastrogiovanni, founder and CEO of HealthView Services. “Driven by health care cost inflation, the elephant will only get bigger and crowd out other issues.”
Using HealthView Prime, advisers affiliated with IRI member companies will be able to quickly calculate expected health care costs for individual clients. The data is a starting point for conversations about retirement savings and decumulation strategies that optimize Social Security payouts and other key factors to a successful retirement. The data can also help individuals decide when to retire and whether moving to a new state is a viable option, the firms say.
Drawing upon cost data from more than 50 million annual health care cases, HealthView Prime uses the actuary- and physician-reviewed methodology to determine average longevity and expected retirement health care costs based on age, gender, health, and time to retirement.
Under the terms of the partnership, IRI member companies will have the opportunity to sign up for HealthView Prime and will be charged based on adviser usage. In addition to HealthView Prime, HealthView Services’ offers IRI members HealthWealthLink, an integrated retirement planning tool that assists financial advisers in preparing personalized estimates of retirement health care costs.
A one-click version of HealthWealthLink is also available to calculate average retirement health care costs.