Workers Clueless about Retirement Health Care Costs

A Sun Life Financial survey suggests that over nine in ten American workers either have no idea what their health care costs are likely to be in retirement, or underestimate those costs.

Forty percent of respondents claim to have “no idea” what their retirement health care costs would reach, and only 8% estimate that their costs will reach $200,000 or more, Sun Life found in its survey, Flying Blind: How Working Americans View Healthcare Costs in Retirement. Forty-three percent of those polled said they feel “not at all confident” and only 9% feel “very confident” in their ability to meet health care costs in retirement. This sentiment is evident in all age groups, with half of workers in their fifties “not at all confident” in their ability to meet health care costs in retirement.  

Sun Life found nearly 75% of American workers lack plans to cover health care costs in retirement. That includes workers approaching age 65; only 30% of workers in their fifties have established plans to meet future health care costs, and 40% of workers in their sixties have adopted plans.   

The survey found that although 75% of American workers with more than $250,000 in assets feel some level of confidence that they can meet health care costs in retirement, only 26% of those respondents have established any plan for meeting those costs.   

When asked if concerns over meeting future health care costs have prompted them to adopt a change in lifestyle (such as improved diet and exercise, quitting smoking, or reducing stress) over half of respondents (53%) reported making lifestyle changes, with 12% saying they have made “major changes.” These preventative measures transcend age groups with even 45% of thirty-somethings having made health and lifestyle changes to reduce future long-term health care costs.   

Americans with household income over $175,000 (28%) are far less likely to have made such changes than less affluent counterparts (51% for those earning $100,000-150,000).