According to a recent survey by EBRI and Mathew Greenwald & Associates, more people are expected to delay retirement just to continue to receive employer-sponsored health insurance. In 2003, 15% said they would retire earlier if they had access to health insurance, but that percentage almost doubled to 27% in 2012. While delaying retirement to continue to receive benefits is a good goal, the survey reported that only 19% were actually able to do so.
The implications for employers and the opportunities for advisors are clear. Not only do older workers make more money and cost more to insure, but delaying retirement thwarts opportunities for promising younger workers, who may decide to move on. Employees who feel more secure in retirement and have healthy account balances will be more likely to retire — the health care exchanges coming next year could provide retirees with greater access.
Health care is not only one of the biggest expenses in retirement, it’s also the hardest to estimate. In 2012, a couple at age 65 needs $163,000 to have a 50% chance of covering future health care costs — and $283,000 for a 90% chance. (For a deeper dive into this issue, see NAPA Net Portal Conductor Nevin Adams’ recent commentary, here.)
