Wealthy Americans Terrified of Health Care Costs in Retirement

According to a survey from Nationwide Financial, nearly three in four soon-to-be-retired high-net-worth individuals say health care costs spiraling out of control is among their top retirement fears.

The survey revealed an opportunity for advisers: 43% of soon-to-be-retired Americans say they plan to discuss health care costs with a financial adviser.

While only one in 10 (12%) of soon-to-be-retired individuals say they are planning to switch financial advisers, of those, more than half (54%) say they would be more likely to stay with their current adviser if they could help them plan for covering health care costs in retirement or discuss the role of Medicare in their retirement.

Thirty-eight percent of those nearing retirement say they have not discussed their retirement at all with a financial adviser. Of those who have, only one in five discussed health care costs in retirement not covered by Medicare.

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“Americans—even those who have diligently saved for their golden years—are not prepared for the reality of health care costs in retirement and don’t really understand how Medicare works,” said John Carter, president of Nationwide Financial Distributors, Inc. “Too many assume their employers will continue to pay their premiums during retirement or Medicare will cover all health care expenses.”

It appears that soon-to-be-retirees lack confidence in the ability of financial advisers to help with this challenge, with three in five (59%) saying most financial advisers are not equipped to discuss retirement health care costs with their clients. This lack of confidence may be unfounded. Those who have broached this topic with a financial adviser indicated that it was worthwhile, with two-thirds saying advisers were helpful or very helpful in discussing information about their health and estimating their health care costs in retirement. 

Understanding Medicare 

Only one in five surveyed say they are confident in their knowledge of Medicare coverage, and more than half say it is very, to extremely, important they educate themselves on Medicare coverage when planning for retirement.