Staying tuned in with the latest trends that are on investors’ minds is a key element to providing comprehensive financial advice. Not only does this prepare advisors for what their clients and prospects may soon ask of them, but it also creates an opportunity for advisors to initiate conversations based on the latest developments in the financial world.
In a recent survey released by the Nationwide Retirement Institute, these insights are delivered. The survey highlights the trends and challenges that U.S. investors are facing in retirement regarding healthcare expenses. Here is a look at the key findings and what they mean for advisors.
Healthcare costs a top concern
According to the survey, healthcare costs rank as the top concern for all three age groups surveyed: future retirees, recent retirees, and those retired for 10 years or more. In the future retiree segment, which is defined as investors over 50 years old that are not currently retired, three out of four (79 percent) say they are “somewhat” or “very” concerned about healthcare costs. Additionally, 58 percent of respondents agreed that they are “terrified of what healthcare costs may do to my retirement.”
What is even more surprising is how substantially higher future retirees are concerned about healthcare costs compared to retirement itself. Only 64 percent indicate the same “somewhat” or “very” level of concern for retirement. Also topping retirement are concerns over long-term care and health insurance.
This paints an interesting picture for the financial services industry where although retirement is often discussed as the primary financial goal of many Americans, healthcare is actually causing more stress in certain segments.
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Approaching the healthcare conversation
Another intriguing finding of the survey is that despite investors listing healthcare costs and health insurance as top concerns, these do not exactly align with what they indicate as their retirement goals. Instead, the two top concerns for future retirees are covering living expenses and travel expenses during retirement.
This puts advisors in a unique position where they can bring potential healthcare costs and health insurance decisions into the foreground with their clients. Though future retirees over 50 years old show the strongest concern over healthcare costs, advisors can translate this to younger clients by showing them how healthcare can impact other areas of retirement and their overall financial picture.
Providing healthcare advice with NaviPlan
Seeing this trend of healthcare becoming an even larger concern for clients, advisors should consider how to best leverage their tools to navigate the topic of healthcare. NaviPlan is specifically suited to help with this process by offering a variety of tools for advisors to provide advice around the healthcare narrative.
In our most recent update to NaviPlan, we have made significant strides to further address the need for detailed healthcare projections as a part of the financial planning process. Advicent has partnered with Aivante, a healthcare analytics company offering solutions for optimizing healthcare planning decisions, to make the latter’s smart data accessible to clients and prospects within NaviPlan through advanced APIs. Through the new Guided Retirement tool, investors can securely enter information about their health, location, goals, and other factors, and Aivante’s analytics can forecast how much they would likely need to cover all healthcare expenses during retirement. Then, NaviPlan can demonstrate an investor’s likely healthcare expenses, alongside leisure and living expenses, in different phases of retirement using comprehensive visual illustrations.
Additionally, with the NaviPlan Scenario Manager, advisors can quickly and collaboratively assess various healthcare expense situations and how they can impact a client’s retirement goal coverage. The NaviPlan client portal opens the door for clients to play with these scenarios on their own time and test different possibilities.
To learn more about the healthcare enhancements included in the NaviPlan 19.3 release, click here >