Retirement healthcare expenses:
belief vs. reality

Americans are worried about potential healthcare costs in retirement. 

Are consumers too worried about retirement healthcare costs?


Americans want professional financial help

Half of consumers believe a financial professional can help minimize big out-of-pocket medical expenses in retirement.6 This worry is driving people to seek professional financial help. More than half of Millennials and 40% of Gen Xers agree that they’ll need help from a financial professional to plan for healthcare in retirement.4 And your help can give them confidence: Among non-retirees, those who work with a financial professional are more than two times more likely to be confident that they’ll have enough money to cover healthcare costs in retirement beyond Medicare.5 

Help people prepare for the reality

When we talk about a goal of a replacement rate of 85%, many participants don’t realize that number already factors in healthcare costs. It may help to remind them. If they’re reaching that goal, they may be in a better position to handle healthcare expenses than they think. 

Of course, it always helps to save more. People aren’t making the most of health savings accounts (HSAs). These triple-tax-advantaged accounts can play an important role in preparing for the future. According to an EBRI analysis, the average HSA contribution in 2014 was $2096, but individuals who opened an account in that year ended with an average balance of only $948.7 This suggests people aren’t using their HSAs as savings vehicles, but as spending accounts. 

Encourage maximizing the use of HSAs, both for future medical costs and to help protect retirement plan balances from loans and hardship withdrawals taken to pay large medical expenses before retirement. And let’s not forget critical illness and accident insurance, which may help mitigate healthcare expenses from the unexpected. 

Contact your Lincoln representative to learn how we can help your clients prepare participants for their futures.

Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates. Affiliates are separately responsible for their own financial and contractual obligations.

1LIMRA: Lions and Tigers and Health Care! Oh My? Consumer Perceptions of Health Care Expense Shocks in Retirement, 2016.
7EBRI: Health Savings Account Balances, Contributions, Distributions, and Other Vital Statistics, November 29, 2016. 

This material is provided by The Lincoln National Life Insurance Company, Fort Wayne, IN, and, in New York, Lincoln Life & Annuity Company of New York, Syracuse, NY, and their applicable affiliates (collectively referred to as “Lincoln”). This material is intended for general use with the public. Lincoln does not provide investment advice, and this material is not intended to provide investment advice. Lincoln has financial interests that are served by the sale of Lincoln programs, products and services.