Retirement is usually seen as a time to relax, spend time with loved ones, travel, or start a new hobby. But it's difficult to reap the rewards of a lifetime of work without some careful financial and health benefits planning.
Aetna and the Financial Planning Association surveyed more than 1,000 Americans ages 45 to 75 with health insurance to find out about their attitudes and habits regarding retirement planning. You may be able to relate to some of the findings.
- Of pre-retirees surveyed, nearly 20 percent have spent "no time" in the past year actively planning for retirement, and more than 30 percent don't know what to anticipate for health care needs.
- Sixty-six percent of pre-retirees who have spent time planning for their retirement, spend the same amount or more time on home improvement. And 60 percent spend the same amount or more time planning for their children's college education.
- Even more amazing, 31 percent of pre-retirees would rather clean their bathroom or pay bills than plan for retirement.
Planning ahead protects your family's resources from what can be considerable health care costs
One of the best steps to take to protect and secure your financial future is to plan for both health and well-being. While both pre-retirees and retirees agree that "good health" is most important to them in retirement, nearly 40 percent have spent less than one hour in the past year planning for health benefits in retirement. Although most pre-retirees focus on the financial aspects of retirement planning, researching and understanding health benefits options seem to be left out of the equation.
Anticipating the future
Although 74 percent of respondents said they factored Social Security and Medicare benefits into their retirement plan, 77 percent are concerned about the financial issues facing these programs.
But planning for retirement is not just about finances; it involves reevaluating everything from your daily routine and budget to your health care options—including Health Savings Accounts (HSAs), long-term care, and life insurance.
Eighty percent or more of pre-retirees and retirees expect to pay for prescription drugs and doctor's visits in retirement. Twenty-nine percent even anticipate costs related to alternative medicine and 5 percent plan for cosmetic surgery.
However, 52 percent of those surveyed expect to spend less than $300 a month on out-of-pocket costs and health care–related expenses during retirement—less than half of the $640 a month the average retiree actually spends.
Clearing the confusion
It's obvious that many Americans have a lot to think about when it comes to planning for retirement, which may be why 63 percent say that "people they know" are very or somewhat confused about health benefits. But, it doesn't have to be this way.
The Healthy Retirement Readiness Tool is an interactive self-assessment that helps initiate and guide planning for a healthy and financially stable retirement. At any stage of life, this tool will assess where you stand in the retirement planning process, matching advice to your current level of planning and offering realistic next steps. Along the way, anecdotes about a person in a similar life stage add personal perspective to all levels of retirement planning.
In addition, because most of us don't realize how much money we spend each year on our medical needs, the Health Expense Calculator estimates annual health expenses, including medical, dental, vision, and prescriptions, both individually and for the entire family. Be sure to utilize this calculator to help you better understand approximately how much money is needed to cover all medical expenses each year.
Now is the time to encourage your staff to start planning and learning all about health benefits and financial needs for retirement. Planning now will serve everyone well in the future.