New Study Shows Financial Advisers Worry (A Lot) About Retirees’ Health Care Costs

Many Americans approaching retirement age consult with a financial adviser to make sure they are on sound footing. It’s a good idea, at least for those who can afford it.

But a new study by Boston College’s Center for Retirement Research finds even those with financial advisers often underestimate the amount they’ll have to spend for long-term care and medical costs.

Researchers surveyed 401 financial advisers over the summer and found about 60% think long-term care and other medical expenses pose one of the biggest risks for their older clients. At the same time, just 33% of the older households surveyed cited long-term care or medical costs as their biggest financial risk.

Half the advisers were also very worried about their clients’ ability to cover their medical expenses, while just 24% of the household respondents considered medical expenses would be a major risk. In fact, they ranked long-term care and medical costs among their lowest risks.

Where is the disconnect? A story in Housingwire speculates that people underestimate the time they will need long-term care. They also underestimate the costs.

And, unfortunately, financial advisers were more accurate about how those high costs make a big dent for people on fixed incomes. (In 2023, the median annual cost for a private room in a nursing home was $116,800; $75,500 for home health aides and $64,200 for an assisted living facility).

So, what’s the bottom line: Listen to your adviser (if you have one) and seek education (even if you don’t).

What’s your experience? Do you feel you are adequately prepared to cover your medical costs after you retire? Share your story with Voices for Affordable Health.