Report: Retirement Healthcare Costs Significantly Underestimated by Americans
TL/DR –
A report by Jackson argues that healthcare costs in retirement are being severely underestimated by pre-retirees, with nearly two-thirds expecting to spend at least $1,220 less than the projected annual expenses of $8,600. The report also indicates that only 27% of the respondents believe they will require long-term care, despite women expressing higher concerns for healthcare but less likely to anticipate needing long-term care. In view of potential healthcare cost increases due to advancements in medical technology, the report calls for better regulations and for policymakers to prioritize legislation that would help retirees afford long-term care or healthcare costs.
Underestimation of Retirement Healthcare Costs, Report Reveals
A recent Jackson report suggests that people are severely underestimating healthcare costs in retirement. This study, conducted in partnership with the Center for Retirement Research (CRR) at Boston College, revealed that nearly two-thirds of pre-retirees are likely to undershoot the estimated $8,600 annual healthcare costs in retirement.
Long-Term Care and Healthcare Risks in Retirement
Interestingly, only 27% of those surveyed think they’ll need long-term care, despite women expressing more concerns about healthcare but overlooking long-term care needs. Moreover, 40% of financial advisors doubt their client’s ability to afford quality care in retirement.
Call for Funding Long-term Healthcare Programs
Glen Franklin from Jackson National Life Distributors LLC (JNLD) stressed the necessity for stability in retirement and raised concern about many being unprepared for future healthcare costs. He hopes the new administration will legislate funding for long-term healthcare programs for retirees.
The Impact of Healthcare Trends on Retirement Planning
The Peterson-KFF Health System Tracker shows a 120% increase in US healthcare costs since 2000 due to advancements in medical technology and treatment. Andrew Eschtruth of CRR emphasized the need for retirees to understand their potential healthcare needs and costs.
Solutions for Funding Retirement Healthcare Costs
Meanwhile, Jackson’s study revealed that over 60% of investors might consider spending their assets to qualify for Medicaid as a long-term care funding solution, despite not being fully prepared for the accompanying lifestyle changes. This research included online surveys of 500 investors aged 48-78 years, with $100,000 in financial assets.
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