Summary
Near-retirees in higher education are concerned about their ability to afford health care in retirement (42% are very concerned and 29% somewhat concerned), with younger near-retirees being more concerned than older individuals. In fact, near-retirees are more concerned about health care than with other retirement-related issues, such as having enough money to retire when planned and outliving their savings in retirement. Accompanying this concern about affording care is a great deal of uncertainty regarding the amount typically spent by retirees for premiums, deductibles, co-payments and other medical expenses. Despite their level of concern and uncertainty regarding health care expenses, only 17% have discussed the issue with a financial advisor. At the same time, 97% of higher education near-retirees think that it very or somewhat important to receive advice about paying for health care in retirement as they approach retirement. In addition, a savings vehicle specifically earmarked to pay health-related expenses during retirement appeals to most near-retirees. A current challenge for colleges and universities is to manage the retirement patterns of their workers, particularly faculty. But if individuals feel ill-prepared to meet health care expenses, many will likely delay their retirement. Any changes to employer-sponsored retiree health benefits should consider the potential for such unintended consequences. At the same time, providing information and advice regarding strategies to meet health care expenses in retirement, as well as providing a means to save for the expenses likely to be incurred, can address such roadblocks to retirement.
