Americans Underestimate Retirement Costs

A recent survey found that most Americans underestimate how much they will spend in retirement on health care costs. The survey, which was carried out by First Command Financial Services, resulted in a few very interesting findings.

(Image: FirstCommand.com)

• 72% of Americans are concerned about the cost of health care in retirement.
• Less than 33% of Americans figure in health care costs when planning for retirement.
• 41% of Americans with a financial advisor are planning for health care costs in retirement.

Scott Spiker, First Command Financial Services’ CEO, points to the unsure nature of government programs as an additional reason why retirement savings plans should be altered.

Said Spiker: “As difficult as it is to say, Americans have every reason to be concerned about health care costs in retirement. As government programs — including Social Security and Medicare — become increasingly stretched to keep up with the growing population, retired Americans should be prepared to bear more of the financial burden. That’s why it’s important to take health care expenses into account now as you plan for your retirement.”

When asked to predict how much they will need in retirement savings to cover health care costs, the survey found that Americans dramatically underestimated the amount.

“Ignoring the problem won’t make it go away, and Americans shouldn’t rely on government to solve these issues,” warned Spiker. “Financial advisors have the tools and expertise to help consumers determine how much to set aside to cover medical expenses and prepare now for the standard of living they desire in their retirement years.”