Retirees May Be Overly Confident About Health Care Costs

June 26, 2012 ( - Despite the rising cost of health care, many retirees are not concerned about paying for it.

By Corie Russell | June 26, 2012
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According to a Nationwide Financial survey, nine in 10 retirees with at least $250,000 in household assets are not concerned about paying for their future health care costs beyond what Medicare covers.

Ninety-three percent of retired Americans say they are at least somewhat confident they can pay for their future health care costs, yet 46% of Baby Boomers nearing retirement with the same amount of assets say they are “terrified” of health care costs.

“The good news is we’re not seeing the panic that many Boomers nearing retirement are having, but we hope this isn’t over-confidence that could lead to a lack of preparedness down the road,” said John Carter, president of Nationwide Financial Distributors Inc., a subsidiary of Nationwide Financial. “For many of the retirees we surveyed, most of their health care costs have yet to come.”

Carter said despite retirees’ confidence in paying for health care costs, Boomers should not think it will be as easy when they retire. “Many Boomers can expect a very different retirement than that of their parents,” he said. “In addition to higher health care costs and longer life expectancies, Boomers likely won’t have pensions or employer-paid health care, and realistically they’ll need to be prepared to pay for their own health care costs in retirement."