Two-thirds of U.S. adults (66%) are terrified of what medical costs may do to their retirement plans and worry that a single large healthcare issue could ruin their finances for years to come, says new Nationwide Retirement Institute research.
Even more Americans (72%) say that a top fear is that their healthcare costs will go out of control during their retirement, a Nationwide press release adds.
According to the Centers for Disease Control, 60% of Americans live with a chronic disease, such as heart disease and stroke, cancer or diabetes. The survey found that more than two-thirds (70%) of those people, based on a national sample, do not have a written financial plan that includes how to pay for those healthcare costs in retirement.
In addition, more than two-thirds (68%) of Americans do not work with a financial professional, Nationwide said.
Nearly three-quarters (72%) of respondents said they wish they understood Medicare coverage better. Most (70%+) responded incorrectly when asked basic questions about Medicare, such as what it covers, how Medicare Part B works, and costs for different Medicare plans.
Survey respondents also underestimated the average cost of healthcare in retirement. Respondents estimated it would be $55,343 for an individual. Meanwhile, Fidelity estimated a couple age 65 retiring in 2022 will need $315,000 to cover medical expenses in retirement, not including long-term care.
“Our survey shows that Americans need more knowledge, guidance, and ongoing support to make informed decisions about their financial plans,” said Kristi Rodriguez, senior vice president of the Nationwide Retirement Institute. “By incorporating health care into financial planning conversations, financial professionals can help clients better prepare for the rising costs of healthcare.”
Other findings of the survey include:
• 59% of respondents are not confident that they can pay for healthcare costs as they age.
• 57% worry about their ability to pay for caregiving for their partner/spouse.
• 26% expect AI advancements in healthcare to add over a decade to their lifespan.
• 18% of adults have postponed healthcare steps — such as a medical procedure, physical exam, or renewing prescriptions — in the past 12 months to save money.
• 10% of Americans say they may downgrade their health insurance plan because of high inflation.
• 51% say they could not pay off an unexpected $5,000 healthcare out-of-pocket expense.
The Harris Poll conducted the research for Nationwide among 1,260 adults age 18+ residing in the U.S., including 301 Gen Zers (18-26), 310 millennials (27-42), 307 Gen Xers (43-58), and 342 boomers+ (59+). The survey was conducted from August 28 – September 11, 2023.
