What Pre-Retirees Fear Most and Talk About Least

By Hal M. Bundrick

NEW YORK (MainStreet) — Are financial advisors interested – or even qualified – to talk to their clients regarding matters of healthcare? It's the primary concern for many investors, yet a conversation they aren't having with their advisor.


A new survey conducted by Harris Interactive of 801 Americans over 50 with at least $150,000 in household income reveals that three-quarters of pre-retirees say their top fear in retirement is the cost of health care, and yet 64% say they have not discussed their retirement plans at all with a financial advisor. Of those who have met with an advisor, under than one-quarter (22%) discussed health care costs not covered by Medicare in retirement.

"Whether it is the economy, concerns about the implementation of the Affordable Care Act or skyrocketing health care costs, our survey shows America's workers are increasingly concerned about how they will fund their health care costs in retirement," said John Carter of Nationwide Financial, sponsor of the research. "More are realizing they can't count on someone else to fix this problem and that they will have to fund their own health care costs in retirement."


Two in five Baby Boomers say they will delay their retirement if they have to buy their own health insurance. However, more than a quarter of Baby Boomers (26%) do not even expect to retire, up from 22% in 2012.


Health care costs are not only a concern for pre-retirees, they are a mystery. The survey asked respondents to estimate how much they thought their out-of-pocket health care costs would be in retirement and guessed $4,300. A 2012 Employee Benefit Research Institute study said out-of-pocket health care expenses for a 65-year-old couple retiring today and living for 25 years would be $283,000.


And nearly two out of three pre-retirees want to understand Medicare coverage better – and with good reason. Those surveyed estimated that Medicare would pay for 69% of their health care costs in retirement. However, Medicare currently covers only about half of the expenses associated with health care services -- and does not cover long-term care costs.

--Written by Hal M. Bundrick for MainStreet