Did you know that the New York Times recently reported the share of Americans with health insurance declined in 2018 — the first such drop since 2009?
The mere thought of health care costs when planning for retirement can be overwhelming, but they may not be as disrupting as many fear. Even though health care costs tend to increase with age, they eventually level off and even take the place of other expenses. While we can use these figures as a benchmark for what to expect, costs will vary widely per individual depending on health and many other unique circumstances.
Your objective is to create an actionable framework that can serve as a guide when planning for health care in retirement for your clients. The framework can include 4 key components:
- The Approach
- Coverage Considerations
- A Personalized Estimate
- Make it Actionable
Advanced Action Step: HALO can help with the personalized estimate for healthcare costs. After clients take the HALO assessment, review the health care cost section in the report. We know that the cost for individuals can varies widely but with HALO, health care costs are estimated based on various factors include geography, age at retirement, behavior, lifestyle and family history.
A recent article on personalcapital.com provides insights into how advisors can effectively address health care costs in retirement.
Conversation Starter: Planning for health care costs can be scary for clients but helping them think about it as incremental, year-by-year costs instead of a large lump sum can be a better approach. Start by asking your clients, “Do you plan to use Medicare coverage in retirement? Let’s look at how your Medicare options compare to your current plan so we can quickly assess the gaps to help us start your plan for care costs.”
Final Thoughts: Health insurance and Medicare can be complex, and therefore, challenging topics to discuss with clients. Complexity often leads to fear and it’s your role as an advisor to help clients push through that fear so that they can be prepared. Comparing where clients are to where they will be when they’re retired is a great place to get the conversation started.