The LIMRA Secure Retirement Institute found, through a survey of 2,000 Americans between the ages of 50 and 79, and retired at least one year, that 40% had underestimated what they would face in health care costs.
LIMRA research has found that retirees spend at least 13% of their income each
year on health and long-term care expenses. For someone spending $80,000 a year,
this means $10,400 of that money would go toward health care.
Retirees also underestimated other costs, such as paying for basic living
expenses. Twenty-five percent found these costs to be higher than expected.
Twenty-three percent are experiencing higher than anticipated discretionary
Having a plan for retirement didn’t help either, as 43% of those with a formal
plan face higher than projected health care costs. LIMRA says it is critical
for advisers to educate investors about these costs and to encourage them to
open health savings accounts (HSAs), whose balances roll over from year to year
and can come in handy during retirement.
Earlier LIMRA research found that people who own an HSA say these accounts are
part of their retirement strategy.