Advisors may want to brush up on their Medicare knowledge. Nearly nine in 10 of the survey’s respondents said that they are enrolled or they plan to enroll in Medicare, while 72 percent of the respondents said that they wish they better understood Medicare.
“We’re hearing that people want to understand their Medicare coverage better, and we have a responsibility to start to meet them where they need information,” said Carter.
Older, affluent Americans still hold misconceptions about Medicare, including not understanding that parts of the program are not free and that coverage does not cost the same for everyone. Many need help understanding how and when they should sign up for coverage, according to the survey.
Future retirees are more likely to rely on multiple options to cover health-care costs than current retirees—while 59 percent of currently retired respondents said that they would use a wider array of resources like Medicare to help pay their expenses, 71 percent of future retirees said that they would take a broader approach.
Despite their access to more resources like personalized financial advice, most of the survey respondents, 60 percent, could not cover more than $5,000 in unplanned expenses. Nearly one in four of the respondents were unprepared for unexpected expenses of more than $1,000. Most respondents were planning to use their disposable income to cover unplanned expenses.
Health savings accounts (HSAs) may present another opportunity for advisors. While half of the survey had access to an HSA, only 30 percent were saving in them—and only 10 percent were using their HSA as a long-term savings and investment vehicle.
“We’re finding that most people are not leveraging these as a savings vehicle, and this becomes a natural conversation to have with clients and consumers who are retirees and pre-retirees,” said Carter, who suggested that plan advisors and sponsors may need to implement behavioral savings mechanisms employed in 401(k)s, like auto-enrollment and auto-escalation, for HSAs.
Advisors may also want to engage more closely with family caregivers. While Nationwide’s sample of more than 500 caregivers were acutely more aware than others in the survey of the cost and potential impacts of health care expenses, they were also less likely to be planning and saving for those expenses.
Nationwide’s survey was conducted in February among 1,007 U.S. adults aged 50 and older, and 522 U.S. caregivers aged 50 and older.