Although baby boomers are worried about paying for healthcare in retirement, few have taken any financial steps to prepare for it, a new Ameriprise Financial survey
The Health, Wealth and Retirement study, which surveyed more than 1,000 employed baby boomers ages 50 to 64 who are preparing for retirement with at least $100,000 in investable assets, shows that only 19 percent of those surveyed say they've done something to prepare, while 26 percent say they have reviewed their options but taken no action, another 40 percent have thought about it but not looked into it in any detail and 15 percent haven't started to consider the issue.
"Boomers understand that healthcare costs will be a significant expense in retirement, yet many haven't planned — or simply don’t know how to plan — to fund these expenses," says Pat O'Connell, Ameriprise Financial executive vice president.
Just 32 percent have developed an advanced directive, a written statement of their wishes for medical treatment, while 23 percent plan to work longer to continue receiving healthcare coverage and 21 percent have obtained long-term care insurance. Only 17 percent have maximized savings in an employer-sponsored health savings account.
Many estimate they'll need approximately $232,000 per household for healthcare costs in retirement, a figure that's "surprisingly accurate." Yet only 17 percent have actually calculated what they'll need for out-of-pocket healthcare costs.
Most pre-retirees understand their lifestyle choices today can impact future healthcare costs. For instance, 62 percent say they've started to diet or exercise. Still, that hasn't protected many from serious health problems. One in four (26 percent) survey respondents say they or their spouse have been impacted by a serious health event and more than half (54 percent) admit it has impacted their finances.
A recent AARP survey
of 1,002 workers older than 50 shows that 38 percent are not saving for healthcare costs and 44 percent do not have plans to do so in the future. Although many say they're saving for future healthcare costs, 55 percent worry they may not be able to afford the costs.
Most workers say they're including healthcare costs in their general retirement planning, but it's unclear how much they're setting aside, writes the report's author Laura Skufca.
Most workers older than 50 have little confidence in their retirement preparation in general, the study finds. Only 32 percent agree they are very confident they'll have enough money for expenses in retirement, and 34 percent say they've saved to a large extent.
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