Many things in life become less expensive once someone is retired, but one category that actually becomes more expensive is health care. Paying for long-term care was found to be one of the top concerns for retirees and people nearing retirement, according to a recent survey by the Society of Actuaries.
Pre-retirees, specifically, are most concerned about long-term care as well as inflation, in retirement. Both surveyed at about 69% followed by paying for health care, as a whole, at 67%, the survey found.
“There is still a disconnect between what people think they will do in retirement to manage risks, compared to what approaches retirees actually used,” said actuary Cindy Levering.
There are very few people who are planning in the correct ways to be prepared for various situations that may include high health care costs, in retirement. Of those surveyed, 17% of pre-retirees plan for five to nine years in retirement, 19% plan for ten to 14 years and 38% have either not thought about their planning horizon or do not plan ahead.
In addition to health care costs being a concern for pre-retirees once they enter retirement, the majority of people still have a lot of debt that can make these high costs in retirement even more difficult to handle.
The leading form of debt for pre-retirees was found to be mortgage debt, at 52%. This was followed by credit card debt, at 48%, and car loans, at 40%.
And once in retirement, the financial shocks that were most common among retirees were home repairs, at 23%, followed by major dental expenses, at 24% and medical/prescription expenses, at 20%, the survey found.
Written by Alana Stramowski
