A majority of Americans nearing retirement are eyeing financial advisors for help with planning for the costs of health care.
Sixty four percent of baby boomers expect an advisor to play at least some role in discussions about health care costs in retirement, according to a study by Ameriprise Financial released Thursday. Fifteen percent of the more than 1,000 employed baby boomers surveyed indicated that they want advisors to help them create comprehensive health care financial plans for retirement. The same amount of respondents also want advisors to be able to provide an explanation of various health care options.
"For the financial planning community it shows it shows that clients are aware of the complexities of health care and are looking for advisors to be a resource," says Pat OConnell, executive vice president of Ameriprise Financial. "Clients are looking for guidance."
OConnell emphasizes that advisors can be most valuable to their near-retirement age clients when addressing health care by having experts lined up who can help clients. For instance, as a way to assist the firm's advisors dealing with clients' complex medical-related issuess, Ameriprise began partnering with health insurance providers three years ago, O'Connell says. The arrangement has helped advisors educate clients and, when necessary, refer them to more seasoned professionals in the health care arena, a practice similar to what many advisory firms have done with attorneys and CPAs.
"The advisor can't be all things to everyone," says O'Connell of the importance of planners forging relationships with health care professionals to address clients' medical issues as they near retirement age. "Firms need to provide education in this area."
Additional key findings from the Ameriprise survey include:
- The overwhelming majority (86%) of baby boomers expressed concern about the affordability of health care in retirement.
- Fifteen percent have not yet begun to consider how they will cover health care costs in retirement.
- One-fourth (26%) have reviewed their options for health care costs in retirement but have taken no action.
- One in five (19%) have considered contributing to a Health Savings Account to help fund health care costs in retirement.
- About one-third (32%) say they have thought about purchasing long-term care insurance.
- $232,000 is the mean amount among respondents' answers when asked for a "ballpark figure" on what is needed to cover health care costs in retirement.
- Long-Term Care: What Advisors Should Know
- Are Health Care Costs in Retirement Really So High?
- Clients Look to Advisors for Social Security Advice