Baby Boomers Concerned About Health Care Cost

Most are concerned but few are taking any financial action to do anything about it

Even though, 86% of baby boomers show concern about the affordability of health care for retirement, hardly any pre-retirees take financial steps to prepare for health care costs in the future, according to a study released by Ameriprise Financial.

The Health, Wealth and Retirement study, surveyed around 1,000 employed baby boomers between the ages of 50-64, and asked what steps they have taken to prepare for healthcare costs for retirement. 19% of those surveyed said that they’ve taken one or more steps to prepare. 26% said that they have reviewed options but have taken no steps, and 40% said that they’ve thought about preparing but haven’t looked into it. Surprisingly, 15% of respondents haven’t even started thinking about how they will cover health care costs in retirement.

Pat O’Connell, executive vice president, Ameriprise Financial stated that, “boomers understand that health care 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…Fortunately, the national conversation around health care is prompting people to consider their health and the choices they make, as well as the need to build health care expenses into their retirement and long-term financial plan. Pre-retirees have an opportunity to translate this awareness into tangible steps to help prepare for expected and unexpected health care costs and protect the savings they’ve worked so hard to accumulate.”

The majority of pre-retirees believe that being healthy today will have an impact on attaining their financial goals. Even more pre-retirees believe that making healthy choices today will reduce the amount of money needed for health care in retirement.

Interestingly, the respondents think that both their wealth and their health are extremely important. When asked which part of success in their life they wished to improve, 38% said their health, and 35% said their wealth.

Sadly, although the respondents put effort to remain healthy, several baby boomers have already had a serious health problem. 54% of respondents said that the health problem affected their finances.  Experiencing an expensive health scare before retirement is a concern for 78% of the respondents.

“Maintaining health and preparing for health care expenses is a crucial aspect of living the lifestyle you want in retirement. Nobody can predict the future, but you can take steps and seek the help of a financial professional to plan for it,” said O’Connell.

“Factoring health care expenses – and discussing a plan for affording them with retirement income – into a comprehensive long-term financial plan can go a long way toward feeling more confident about retirement.”