Advisors think their clients are confident in plan to pay health care costs, but many clients still need convincing
Nationwide Retirement Institute® advisor survey reveals opportunity to build client confidence through more conversations
Columbus, OH - More than three in four financial advisors (76 percent) say their clients are confident in their plan to pay health care costs in retirement beyond what Medicare covers. However, when you ask their clients more than one in three (35 percent) don’t feel the same.
“Our survey reveals a gap between what advisors think and what many of their clients think when it comes to health care costs in retirement,” said Ron Ransom, senior vice president of integrated relationship strategies for Nationwide. “The rising costs of health care impacts everyone and many clients are worried. Advisors can build their confidence by having more conversations about their plan to cover those health care costs.”
A Nationwide Retirement Institute® advisor survey finds that 65 percent of their clients have a plan to pay for health care costs beyond what Medicare covers and 76 percent of advisors say their clients are confident their plan has those costs covered.
The online survey of 252 financial advisors by The Harris Poll, conducted on behalf of Nationwide, finds that 72 percent of advisors report that paying health care costs in retirement is a frequent concern their clients express and 63 percent say their clients expect advice on health care costs in retirement.
Advisors also know there are risks not having these conversations. In fact, 34 percent of advisors say their clients would likely leave them if they didn’t help them estimate and plan for out of pocket health care costs in retirement.
What clients are saying
A recent Nationwide Retirement Institute consumer survey (PDF) conducted online by The Harris Poll of 1,007 adults over 50 with a household income of at least $150,000 finds nearly three out of four (73 percent) list out-of-control health care costs as one of their top fears in retirement. And 35 percent of affluent, older adults who work with an advisor say they are not confident in their plan for paying for health care costs beyond what Medicare pays.
While 63 percent of future retirees say they are concerned about not having money to cover unplanned medical expenses, 52 percent of those who have a financial advisor haven’t talked with their financial advisor about health care costs; most commonly because they consider it a personal issue (37 percent).
Open dialogue is crucial – but challenging
Nearly all advisors think it is at least somewhat important that they raise the health care costs in retirement topic with their clients (98 percent), and most think it is very important (71 percent). However, 75 percent of advisors admit that it is at least somewhat challenging to discuss how much clients should expect to pay in health care costs apart from Medicare in retirement.
“While often considered personal, you can’t adequately plan for health care costs without discussing the topic,” Ransom said. “Balancing health care costs with a lifestyle goals conversation may make it easier for the advisor to best address their client’s anticipated or unanticipated needs in retirement.”
To help advisors have these conversations, Nationwide’s Health Care Cost Assessment tool uses proprietary health risk analysis and updated actuarial cost data such as personal health and lifestyle information, health care costs, and medical coverage. It provides a meaningful, personalized cost estimate that will help advisors and clients estimate future medical and long-term care expenses.
Advisors can visit www.nationwidefinancial.com/HealthCareinsights to learn more.
About the advisor survey
The survey of 252 financial advisors with at least 50 percent of their clients having total investable assets of $250,000 or more was conducted online from Oct. 16-26, 2017. The advisor data was not weighted and therefore is only representative of those who were surveyed. Because the sample is based on those who were invited to participate in the Harris Poll Online research panel, we cannot calculate estimates of theoretical margin of sampling error.
About the consumer survey
The survey was conducted online by The Harris Poll on behalf of The Nationwide Retirement Institute between February 5 and February 22, 2018, among 1,007 U.S. adults aged 50 or older with a household income of $150,000 or more (“affluent adults”), including 634 future retirees, 506 who work with a financial advisor, and 553 employed affluent adults. Data are weighted where necessary by age by gender, race/ethnicity, region, education, income, marital status, and propensity to be online to bring them in line with their actual proportions in the population. Because the sample is based on those who were invited to participate in the Harris Poll Online research panel, we cannot calculate estimates of theoretical margin of sampling error.
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This material is not a recommendation to buy, sell, hold, or rollover any asset, adopt an investment strategy, retain a specific investment manager or use a particular account type. It does not take into account the specific investment objectives, tax and financial condition or particular needs of any specific person. Investors should work with their financial professional to discuss their specific situation.
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