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Health care and retirement

Health care cost planning, optimized

Help your clients feel confident about their plans for health care and long-term care costs in retirement with this free estimator tool.

Overview

Get a handle on health care to prep clients for retirement

Health care costs, including the cost of insurance, will be one of the biggest expenses your clients face in retirement. Consider reaching out to clients about incorporating health care considerations into their retirement planning .

Watch these health care event replays and earn CE credit

Health care costs, including the cost of insurance, will be one of the biggest expenses your clients face in retirement.

Watch the replays of our health care webinars to learn how you can help your clients face retirement health care costs with confidence. Available on demand, the replays can help you gain a better understanding of the health care landscape and how it figures into your clients’ retirement planning.

Both replays are eligible for CE credit (click the replay links for details).
 

Select a webinar title below to begin its replay.

Retire ready: Helping clients navigate retirement health care decisions

Helping clients navigate early retirement health care options

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Empower your clients to make informed decisions about health care

 

Planning for retirement can be challenging. Retirees worry about outliving their money, with high health care costs being the biggest concern.1 Put your clients at ease by helping them plan for health care costs alongside their retirement planning.

Incorporate personalized estimates into your clients' financial plans with our free estimator

The proprietary Health Care Cost Estimator tool was built in partnership with Mercer, a leading benefits provider. The printable inflation-adjusted and location-based estimates include costs for health care and long-term care applicable for the first year of care.

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Understand these three areas of health care cost planning in retirement

 

To start the conversation with your clients, you need to look at three areas: budgeting, funding, and the possibility of long-term care needs. For a deep dive into these items, review our detailed advisor's action guide.
 

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  • Budgeting: Our Health Care Cost Estimator tool will help give your clients customized estimates of health care and long-term care costs as an annual budget line item instead of a larger lump sum.
  • Funding: Potential health care costs can include premiums, out-of-pocket expenses, and others. Look to your client's other sources of income or savings to help fund these.
  • Discuss long-term care costs: What's the likelihood that your client will have long-term care needs? What type of care might they consider? Factor these into the planning discussion.
Client resources

Start the conversation and educate your clients

 

To help your clients plan for health care and long-term care costs in retirement, you first need to ask questions and provide them with educational resources.

Below are helpful guides you can share with your clients to help educate them on the ins-and-outs of health care cost planning in retirement.

Include health care costs in retirement planning and you will help your clients enjoy a well-funded retirement. Start by viewing costs as a budget line item instead of an overwhelming lump sum, then look at ways to fund these estimates. Share this PDF with your client to bring empowerment to their decisions.

Medicare can be confusing because of its many numerous parts. For many retirees, Medicare insurance is essential for affording health care costs in retirement. Share this PDF with your clients to help them learn about Medicare and make a choice that best suits their needs.

Many clients are not aware that their modified adjusted gross income affects the amount they will pay for their Medicare premiums. Share this PDF with your clients to help demonstrate the importance of retirement income planning and budgeting each year for your healthcare costs.

Long-term care costs cover help for activities of daily living, whether that's in-home or at a residential facility like a nursing home. These costs are highly personalized depending on the preferences and potential needs of your client. Share this PDF with your client so they can learn more about LTC.

HSAs are tax-advantaged accounts that can be paired with a high-deductible plan. They can be used as long-term investment accounts, medical expense accounts, or both. Share this PDF with your clients so they can learn how to get the most out of an HSA option.

Ready to start planning? Our Health Care Cost Estimator tool can help you prepare your clients for health care expenses in retirement.

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FAQ

FAQ

 

Here are facts to help you explain concepts and Health Care Cost Estimator results when using our tool and planning for health care and long-term care costs.

We use a standard actuarial forecasting approach. Health care estimates are calculated using client demographics, client coverage preferences, and the volume of healthcare services they may need in retirement.

We communicate health care cost estimates as the first year's cost instead of an overwhelming lump sum. We recommend using the median number for this year's financial planning.

Because the output will be presented as a range, you can use the median results as a benchmark in this year's planning and incorporate these into your client's financial plan like other fixed expenses. Print the customizable report to share with your clients.

Yes. The model includes a 2% inflation rate for Pre-Medicare and dental and a 2.4% rate for post-Medicare based on the Consumer Price Index assumptions from the 20202 Medicare Trustees' report.

We include costs for premiums as well as out-of-pocket costs for medical, dental, vision, and prescriptions.

LTC services help individuals with activities of daily living such as bathing, dressing, toileting, and eating when needed for 90 days or more.

LTC can be temporary (after surgery or in hospice care) or permanent (ongoing permanent disability or chronic conditions).

The full cost of care is included. Services include adult day care, assisted living, homemaker services, home health-aid, nursing homes, room and board, health care premiums, and out-of-pocket expenses for various types of LTC. The estimate does not assume any LTC insurance premiums.

Yes. If your client retires after 50 but prior to Medicare age, the tool will estimate both their pre- and post-Medicare cost.

 

Yes. There are three pre-Medicare plans to select from: Bronze, Silver, and employer-sponsored. Based on research, the Gold and Platinum plans are not options as they make up a very small percentage of the plans selected.3

Silver plans cover about 70% of health care costs unless eligible for cost sharing reduction in the form of subsidies. They have a moderate monthly premium and moderate cost when care is needed. This plan is good for people who can afford a higher premium than bronze and wish to have routine care covered.

Bronze plans cover about 60% of health care costs. They offer the lowest monthly premium and have the highest cost when care is needed. This plan is good for protecting against worst-case medical scenarios, but most routine care will typically not be covered.3

If you have additional questions, please feel free to reach out to your sales executive for support. If you don't have an aligned sales executive, contact sales at 800-997-2798 or at advisor_services@vanguard.com.

Insights

Featured insights on retirement health care planning

 

  • Advisor sitting with man and woman couple
  • Older child and their younger sibling lovingly embracing

Disclosures and footnotes

  1. Employee Benefit Research Institute, 2020. 2020 Retirement Confidence Survey Summary Report, available at ebri.org/docs/default-source/rcs/2020-rcs/2020-rcs-summary-report.pdf?sfvrsn=84bc3d2f_7.
  2. 2020 FY data incorporated into the 2020 Model.
  3. 2018 Retiree Medical Cost Forecasting Model reviewed by Mercer in 2020.

The information contained in this website is for informational and educational purposes only. The information on this website does not constitute financial, investment, legal or tax advice. Please consult with an attorney or tax professional for your specific situation.