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?

ccording 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.

ield 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. ​