A Harris Poll released by Nationwide Financial surveyed individuals who have at least $250,000 or more in household assets and plan to retire by 2020. Respondents reported health care costs as a major concern.åÊ
73 percent of those nearing retirement reported out of control health care costs as one of their top retirement fears, and nearly 1 in 5 reported being fearful of declaring bankruptcy as a result of health care costs.
Most underestimated the average annual health care cost thinking they would need $5,621 annually, while the national average is $10,750.
ÛÏOne reason people may underestimate the amount of money needed to cover their health care costs in retirement is that many workers do not think they will ever need long term careÛ_ Americans also mistakenly believe that Medicare covers long term care ÛÒ it does not.Û said Kevin McGarry, director of the Nationwide Institute for Retirement Income.
åÊA USA Today / AP Article lists these tips for preparing for retiree health care costs. If you review this blog, you will know that these are common themes we have stressed over the years.
1. Developing a retirement spending plan. AARP and others offer a retirement calculator to help you estimate retirement costs and determine how much you should save.
2. Buy disability insurance. 9% of workers have already withdrawn money from retirement savings, sold assets or borrowed money for a serious illness or medical procedure. Coverage will replace at least a portion of your income if you’re unable to work due to illness or injury. Think the duck.
3. Consider long-term care insurance.
4. Get healthy. One of the most effective tips may be one that many workers have figured out on their own. More than half of the workers surveyed by Sun Life said they are trying to improve their health by dieting, getting more exercise or quitting smoking because they’re worried about future health care costs.åÊ