Affording health care during retirement remains the No. 1 concern of working Americans, according to a new survey from Edward Jones.
Affording health care during retirement remains the No. 1 concern of working Americans, according to a new survey from Edward Jones.
Twenty-three percent of respondents cited health care costs as a major fear in retirement. That percentage is down from 30% four years ago, but still represents a large group of Americans who are struggling with the complexity of retirement planning, according to Joan Fernandez, a principle at Edward Jones.
Of those between 55 and 64, health care costs were identified as a major concern by 35% of respondents, down from 43% in 2006.
Despite the drop, Ms. Fernandez doesn't see positive trend because the cost of health care in retirement remains the No. 1 concern across multi-generational groups. The lower percentage, she said, “could be the result of so much more recent public dialogue on the subject.”
A key point to consider, she added, is that previous generations would not have ranked health care costs this high among overall retirement concerns.
“We do think it points to the fact that planning for retirement is complicated,” she said. “And it speaks to how individualized these plans need to be.”
The survey of 1,008 adults, which was conducted during the last four days of October, was designed to identify generational concerns regarding retirement planning and to help Edward Jones determine if the firm was missing anything, Ms. Fernandez said.
The survey also found that 19% of Americans believe they will have to work longer to help finance their retirement.
In 2006, only 12% of respondents expressed the same concern.
Among the respondents, those with annual incomes between $75,000 and $100,000 indicated they are concerned about having to work longer (35%), and 21% of the same group believed they will have to “cut back on a desired lifestyle.”
“While the numbers may have changed slightly from the 2006 survey, the concerns remain the same for Americans of all ages,” Ms. Fernandez said. “We don't know the future of health care costs and we can't predict the outcome of elections, but we do have control over how we plan for retirement.”
She added that the general shift toward reduced spending and increased savings by consumers is a step in the right direction, but such practices need to be extended and reinforced with an actual plan.
“People's values have shifted from a general sense of putting it off, but you still need to have a plan and it needs to be a written plan,” she said.
The first step in that process is deciding what you want to do in retirement, she said.
“Once there's an idea of spending needs, then you can look at how much money you have and how much you will need over time,” she said. “At some point you will probably need some professional advice.”
