Discussing health care costs in retirement is “new territory” for many advisors, according to a Harris Interactive survey of over 500 advisors.

Among respondents, 56% said that it is “challenging” to “very challenging” to discuss such information.

Retirement planning is certainly a common concern for financial advisors, and cost-of-living is a vital issue in retirement planning. So why is it so challenging to discuss health care costs, when going over cash flow needs in retirement?

“One of the biggest challenges in discussing health care costs with clients is that health care and long term care are very personal topics,” John Carter, president of distribution and sales for Nationwide Financial, told Financial Planning. “People naturally shy away from them. Another challenge facing advisors is that many clients associate long term care with nursing homes and not as a way to keep them in their homes longer.”

In the new survey, three out of four advisors said many of their clients don’t seem to realize how crucial it is to plan for health care costs in retirement and nearly half of their do not have a plan to pay for those costs, according to Carter. Some surveys have put lifelong out-of-pocket health care costs for an average 65-year-old couple at more than $200,000, not counting possible outlays for long term care.

Part of the problem may be that advisors tend to focus on other areas, paying little attention to retirees’ medical budgets. Only 30% of the advisors surveyed said they were confident in their ability to estimate their clients’ health care costs in retirement. Instead, most advisors said they remind clients of the importance of health care costs, then switch topics.

Despite this reluctance, advisors who avoid talking about future medical bills could pay a steep price.

“Advisors need to have these discussions with their clients,” Carter stated, “especially since 49% of the advisors we surveyed believe they could be liable for not properly preparing their clients for the costs of health care in retirement.”

Now for the good news. In the survey, 80% of the advisors surveyed said they know if they can have these discussions, their clients will stay with them. Thus, some medical schooling may be rewarding.

“Nationwide Financial’s Personalized Health Care Assessment helps advisors estimate their clients’ health care expenses in retirement by using proprietary health risk analysis and up-to-date actuarial cost data,” Carter said. It’s much easier to have these difficult conversations when advisors can provide a fact-based cost estimate based on their clients’ health risk and lifestyle, then build a plan from there.”

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