Healthcare costs staggering in retirement
Healthcare Costs Staggering in Retirement
Your employees have many
things to think about when it comes to retirement. But are they forgetting
about healthcare?
According to a study from
the National Association of Government Defined Contribution Administrators Inc.
(NAGDCA), a 65-year-old couple can expect to pay $220,000 on health care during
their retirement.
That isn’t the only
surprising find about healthcare in retirement:
- Employer-sponsored
health benefits are disappearing due to increased life span and the size of the
baby boomer generation. Only one-in-six large employers (500 to 4,999
employees) offer health insurance coverage to retirees, according to the How America Saves 2014 by Vanguard.
- Medicare
doesn’t cover all health care costs. An Employee Benefits Research Institute
study shows that Medicare will cover 62 percent of one’s health care costs in
retirement, meaning a person is responsible for 38 percent of those costs.
- Medicare premiums
cost a healthy retiree about $1,705a year. When you add this cost to the price
of Medicare prescription drug coverage and Medicare’s supplemental plan,
Medigap, costs soar to $3,937per person or $7,874 per couple. Deductibles and
co-pays are not included in this amount.
- Seven out of 10
people over age 65 will need long-term care at some point, estimates the U.S.
Department of Health and Human Services. Long-term care, which is not covered
by Medicare, covers home health care, adult day care, assisted living, and
nursing homes. Average prices per year begin at $82,000 for adult day care, the
least expensive option, and climb to $226,300 for a private room in a nursing
home, according to findings from MetLife Mature Market Institute.
How Deferred Compensation Can Help
Your employees can use their Ohio
Deferred Compensation account as a way to pay for healthcare costs in
retirement. They can take advantage of the tax-deferred savings and compound
interest to grow their account.
Field Account Executives can
provide educational workshops and guidance around this topic. Call 877-644-6457
to schedule a visit from a Field Account Executive.
Download an article on this topic to share with your employees. Read the healthcare study from NAGDCA.
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