Retirement Plans and Health Care Expectations: A Survey of
Journal of Retirement Planning (04/01) Vol. 4, No. 2 p.24; Ruffenach, Glenn

A recent survey of pre-retirees in 396 households revealed to what extent people age 45-55 feel they need to cover expenses after retirement. An important category of costs that greatly affects the lives of retirees is health care. Rising costs and burgeoning numbers of people requiring health care have placed more pressure on individuals to take greater account of their health care needs as part of pre-retirement financial planning. Two-thirds of respondents reported having a portfolio of long-term investments, such as stocks, bonds, and mutual funds. However, less than half reported using the services of a financial advisor or planner. The sample of respondents consisted of a heavy population of white, educated, high-income individuals, for which financial planning should be of significant importance. Most respondents found the use of retirement wealth critically important, and rather than build estates and leave financial legacies to future generations, the majority of these people plan to consume within their lifetime whatever they accumulate. Although they are uniformly concerned about some types of costs, such as health care, and not having enough money in general, their concerns are not uniform across all categories of life's basic needs, such as transportation and taxes. Health care is a major issue that is often understated. Some health care needs are only partially covered or not covered at all by insurance. In addition, health care needs change over time. A potential role for financial advisors lies in aiding clients in making more accurate health care cost projections, and linking implications of those projections to financial plans.

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