Health Care Costs in Retirement Survey Among U S Adults Ages 50 and Older October 2016 Presented by Harris Poll NFM 16070AO 2016 Nationwide Mutual Insurance Company
Health Care Costs in Retirement Survey Among U.S. Adults Ages 50 and Older October 2016 Presented by Harris Poll  NFM-1607...
Target Group and Method This survey was conducted online from September 14 22 2016 to a targeted subset of the U S population 1 316 U S adults aged 50 or older Research participants were drawn from the Harris Poll Online HPOL research panel and appropriately incentivized Results are weighted to the U S General Online Population of adults by age by gender race ethnicity education region household income marital status and propensity to be online Because the sample is based on those who were invited to participate in the HPOL panel and not random we cannot calculate estimates of theoretical sampling error 2
Target Group and Method      This survey was conducted online from September 14-22, 2016 to a targeted subset of the U.S. ...
Nearly half of older adults expect to retire in the next decade Over one third 35 do not expect to retire Year Expect to Retire 2016 2017 Age Gender
Nearly half of older adults expect to retire in the next decade     Over one third  35   do not expect to retire.  Year Ex...
Health care costs in retirement are feared The majority of adults admit that one of their top fears in retirement is their health care costs going out of control 74 and they are terrified of what health care costs may do to their retirement plans 64 the latter up significantly since 2014 56 and 2015 57 Almost half would delay their retirement if they had to buy their own health insurance 47 Agree NET Disagree NET One of my top fears in retirement is my health care costs going out of control I am terrified of what health care costs may do to my retirement plans I would delay my retirement if I had to buy my own health insurance I would delay my retirement in order to keep my children on my employee based health insurance plan I am currently dealing with health care costs for my parent s 26 74 36 64 Non retirees are more likely to agree than retirees 71 vs 59 53 47 Non retirees are more likely to agree when compared to retirees 62 vs 34 18 Affluent adults are more likely to agree when compared to the non affluent 28 vs 16 as are non Retirees vs Retirees 23 vs 13 7 Affluent adults are more likely to agree when compared to non affluent 11 vs 6 82 93 Base Have children n 999 Base Qualified respondents n 1316 Q740 How much do you agree or disagree with the following statements direction of significant change from 2015 Women are more likely than men to agree 79 vs 67 Green significantly higher at the 95 confidence level 4
Health care costs in retirement are feared     The majority of adults admit that one of their top fears in retirement is t...
Majority are concerned over medical expenses and LTC having enough money benefits to last through retirement Top concerns when planning for retirement are not having the money to cover unplanned medical expenses 72 having money to cover LTC expenses 70 not receiving enough through government benefits 69 and having enough money to last through retirement 66 particularly among those with less than 150K in household income Very Somewhat Concerned Not having the money to cover unplanned medical expenses Retired 72 Not Retired HHI
Majority are concerned over medical expenses and LTC  having enough money benefits to last through retirement     Top conc...
Beyond income Social Security and Medicare top list of sources used to pay for health care costs in retirement Less than half 47 use or plan to use savings Far fewer use plan to use Medigap credit cards or loans Sources To Pay For Health Care Costs in Retirement Social Security 64 Medicare 61 Savings 47 Medigap 15 Credit cards Loans Other Those with a financial plan are more likely than those without a plan to use plan to use Medigap 21 vs 8 8 1 Groups more likely than their counterparts to use plan to use savings Affluent adults 67 vs 43 Men 53 vs 41 Non retirees 54 vs 40 Those with a financial plan 60 vs 27 24 Green significantly higher at the 95 confidence level Base Qualified respondents n 1316 NEW Q1410 Beyond income what sources do you use plan to use to pay for health care costs in retirement Please select all that apply 6
Beyond income, Social Security and Medicare top list of sources used to pay for health care costs in retirement     Less t...
Majority of non retirees are taking action now to save for health care costs in retirement Most commonly non retirees are building their savings account 41 One in three are not doing anything now to save for these costs Doing Now to Save for Health Care Costs in Retirement Building my savings account 41 Paying off credit card debt and loans 33 Investing i e stocks bonds real estate ventures etc 28 Increasing my 401 k contributions 27 Reducing credit card debt and loans I am not doing anything now to save for health care costs in retirement Doing Any Net 67 25 Restricting my lifestyle to basics of food clothing shelter Other 19 Non retirees with a financial plan are more than twice as likely as those without a plan to be doing anything 88 vs 41 Those with HHI 150K are more likely than their counterparts to be doing anything 84 vs 63 as are men more than women 77 vs 60 3 33 Green significantly higher at the 95 confidence level Base Non retirees n 780 NEW Q1415 Which of the following if any are you doing now to save for health care costs in retirement Please select all that apply 7
Majority of non-retirees are taking action now to save for health care costs in retirement     Most commonly, non-retirees...
Some have taken potentially harmful steps to deflect health care costs in retirement While about half of older adults took vitamins supplements 49 and or ate healthy foods 47 in the past 12 months to avoid or minimize health care costs three in ten 31 have taken negative actions particularly those with HHI
Some have taken potentially harmful steps to deflect health care costs in retirement     While about half of older adults ...
Over 500 in unplanned expenses too much to cover for some One in three older adults 34 would be unable to cover more than 500 today including 12 who are unable to cover any amount On average these adults would be able to cover up to 3 155 in unplanned expenses today Highest Amount in Unplanned Expenses Able to Cover Today Mean 3 155 0 12 1 100 12 101 500 10 501 1000 19 1001 2000 2001 3000 3001 4000 4001 5000 5001 or more Unable to cover more than 500 Net 34 8 4 Those with HHI
Over  500 in unplanned expenses too much to cover, for some     One in three older adults  34   would be unable to cover m...
Retirement funds need to last nearly two decades on average On average adults believe they will need retirement funds for themselves for 18 years with only 9 saying they will need retirement funds for more than 25 years Two in five 40 are unable to provide an estimate of Years Need Retirement Funds Available 0 years 1 5 years 9 4 6 10 years 6 11 15 years 7 16 20 years 21 25 years 26 or more years 15 10 9 Not sure can t estimate Average On average retired adults estimate more years that they will need retirement funds than those who are not retired 20 years vs 14 years respectively 40 18 years Green significantly higher at the 95 confidence level Base Qualified respondents n 1316 Q1240 How many years do you think you ll need to have retirement funds available for yourself 10
Retirement funds need to last nearly two decades, on average     On average, adults believe they will need retirement fund...
Majority are unsure of annual health care or LTC costs Most older adults can t estimate health care costs in retirement 60 or LTC costs 75 for themselves and their partner combined However among those who provide an estimate annual costs for health care in retirement are expected to be approximately 12 738 for themselves and their spouse combined considerably higher for LTC at 76 890 HC Costs in Retirement e g premiums copayments deductibles 1K 5K 6K 10K 11K 30K 31K 17 20 24 11 5 7 8 5 3 4 2 0 Not sure Can t estimate LTC Costs 1K 5K Mean Self 5 252 Spouse 9 442 Combined 12 738 6K 10K 11K 30K 31K 60 69 66 8 9 5 1 3 1 4 3 4 12 7 10 Mean Self 59 804 Spouse 25 208 Combined 76 890 Not sure Can t estimate Self Spouse Those with HHI of 150K reported higher mean estimates than those with HHI of less than 150K for themselves HHI 150K 8 004 HHI
Majority are unsure of annual health care or LTC costs     Most older adults can   t estimate health care costs in retirem...
Majority would rather die than live in a nursing home Half of adults are worried they will become a burden to their family as they get older 51 down from 59 in 2015 while three in five 62 say they would rather die than live in a nursing home Three in five adults with children 62 say paying for their LTC will likely use up the money they planned to leave for their children s inheritance Still many 40 doubt they will live long enough for LTC insurance Disagree NET Agree NET I would rather die than live in a nursing home 38 62 Paying for my long term care will likely use up the money that I had planned to leave for my children s inheritance 38 62 I am worried I will become a burden to my family as I get older 49 51 60 40 I doubt I will live long enough for LTC insurance Older adults with HHI
Majority would rather die than live in a nursing home     Half of adults are worried they will become a burden to their fa...
Similarly many have not had a conversation with anyone about health care costs Over two in five older adults 45 have not discussed their health care costs during retirement with anyone particularly those without a financial plan 70 not married 58 not retired 54 or have HHI 150K 46 Discussed health care costs with My Spouse Total 50 Financial Plan Yes 60 No 33 A professional financial advisor Total 43 My Children Total 19 My Friends Total 12 My doctor primary care physician Total 8 Other family member Total 5 An insurance agent Total 4 Retired Yes 56 No 30 Affluent Yes 13 No 20 Retired Yes 13 No 4 Married Yes 3 No 8 LTC Insurance Yes 13 No 3 LTC Insurance Yes 60 No 37 Gender M 13 F 23 Financial Plan Yes 11 No 4 LTC Insurance Yes 11 No 4 Affluent Yes 7 No 4 Married Yes 15 No 26 My coworkers Total 2 My Parents Total 1 Affluent Yes 4 No 1 Retired Yes 7 No 3 Gender M 2 F 8 None I have not discussed these costs NET Other response Net 1 Total 45 None I am not planning these costs yet Total 19 Retired Yes 37 No 54 Affluent Yes 12 No 20 Affluent Yes 37 No 46 Financial Plan Yes 7 No 41 Married Yes 37 No 58 Married Yes 12 No 29 Financial Plan Yes 30 No 70 Retired Yes 10 No 28 Among those with the relationship Green significantly higher at the 95 confidence level Base Qualified respondents Total n 1316 Has Children n 1014 Married n 970 Has Financial Advisor n 510 Q900 901_2 Have you discussed your retirement costs health care costs during retirement or long term care costs with any of the following people Please select all that apply for each item displayed None I am planning for these costs but haven t talked to anyone yet Total 26 13
Similarly, many have not had a conversation with anyone about health care costs      Over two in five older adults  45   h...
Health care costs are a personal issue Of those currently working with a financial advisor but who have not discussed health care costs with a FA over two in five 48 say it is because they feel it is a personal issue The second most common reason reported is that financial advisors don t know enough abut health care costs in retirement 29 Reasons For Not Discussing Health Care Costs with Financial Advisor It is a personal issue 48 Financial advisors do not know enough about health care costs in retirement 29 I do not know enough about health care costs in retirement I do not want to think about health problems 21 8 I m waiting for them to bring it up 4 Health care costs will not happen to me 4 Base Currently working with a financial advisor has not discussed with financial advisor and has relationship n 146 Revised Q903 Why have you not discussed health care costs during retirement with a financial advisor Please select all that apply 14
Health care costs are a personal issue          Of those currently working with a financial advisor but who have not discu...
Spouse does not know enough about health care costs Almost half of older adults who are married but have not discussed health care costs with their spouse 47 say it is because their spouse does not know enough about these costs in retirement About a third say it s because they don t want their spouse to worry about them 32 Reasons For Not Discussing Health Care Costs With Spouse My spouse does not know enough about health care costs in retirement 47 I do not want them to worry about me 32 It is a personal issue 15 I do not know enough about health care costs in retirement Health care costs will not happen to me 13 5 I do not want to think about health problems 2 I m waiting for them to bring it up 2 Caution small base n 86 Base Married and has not discussed with spouse and has relationship n 86 Revised Q905 Why have you not discussed health care costs during retirement with your spouse Please select all that apply 15
Spouse does not know enough about health care costs          Almost half of older adults who are married but have not disc...
Older adults do not want their children to worry about them Half 51 say they haven t discussed health care costs with their children because they do not want their children to worry Believing health care cost is a personal issue 32 is the next biggest reason One quarter 25 say their children do not know enough about it Reasons For Not Discussing Health Care Costs With Children I do not want them to worry about me 51 It is a personal issue 32 My children do not know enough about health care costs in retirement I do not know enough about health care costs in retirement I do not want to think about health problems 25 8 5 Health care costs will not happen to me 2 I m waiting for them to bring it up 1 Green significantly higher at the 95 confidence level Base Has children has not discussed with children and has relationship n 448 Revised Q907 Why have you not discussed health care costs during retirement with your children Please select all that apply 16
Older adults do not want their children to worry about them          Half  51   say they haven   t discussed health care c...
Majority recognizes the importance of discussions with an advisor About three quarters of those who have discussed retirement with a professional financial advisor or consultant believe it is very important important that their advisor discuss health care costs 75 up from 53 in 2015 and LTC costs 72 up from 53 in 2015 with them Still the majority have a plan to discuss health care costs 65 and LTC costs 69 with an advisor the latter up from 44 in 2014 The percentage saying no is down from last year 13 vs 27 2015 Plan To Discuss With a Financial Advisor Importance of Discussing Health Care Costs Health Care Costs 18 25 17 65 75 Long Term Care Costs 18 Affluents are more likely than their counterparts to say that discussing health care costs is very important 43 vs 24 Long Term Care costs 28 13 69 Yes No Up from 44 in 2014 Don t know 72 Very important important Somewhat not at all important direction of significant change from 2015 Green significant difference at the 95 confidence level Base Discussed retirement with a financial advisor or consultant n 373 Q1225 Do you have a plan to discuss any of the following costs beyond those covered by the government in retirement with a professional financial advisor or consultant Q1230 How important is it that your professional financial advisor or consultant discusses the following costs beyond those covered by the government in retirement with you 17
Majority recognizes the importance of discussions with an advisor     About three-quarters of those who have discussed ret...
Most feel their financial advisor is well prepared to discuss health care and LTC costs The majority of adults who have discussed retirement with a financial advisor feel the advisor is well equipped to discuss retirement health care costs 81 up from 65 in 2015 and or LTC costs 89 up from 72 in 2015 Health Care Costs During Retirement Long Term Care Costs 11 19 Yes No 81 89 Retired adults are more likely than non retirees to say that their financial advisor is well equipped to discuss long term care costs 95 vs 83 Green significantly higher at the 95 confidence level direction of significant change from 2015 Base Discussed retirement with a financial advisor or consultant n 373 Q1235 Do you feel your professional financial advisor or consultant is well equipped to discuss the following costs with you 18
Most feel their financial advisor is well prepared to discuss health care and LTC costs      The majority of adults who ha...
Older adults expect to live to age 92 on average On average men are more likely than women to expect to live to an older age age 95 vs 90 Age Expected to Live To Mean 92 years old 50 59 years old 60 69 years old 70 74 years old 75 79 years old Mean 92 years old Men 95 years old Women 90 years old 4 6 9 80 84 years old 18 85 89 years old 21 90 94 years old 95 99 years old 100 years old or older 18 7 16 Median 88 years old Green significantly higher at the 95 confidence level Base All respondents n 1316 NEW Q280 1300 Age Expected to Live to calculation 19
Older adults expect to live to age 92, on average     On average, men are more likely than women to expect to live to an o...