Americans in Tug-of-War Between Early Retirement and Health Costs

TD Ameritrade’s Retirement & Health Survey found that for 44% of Americans older than 45, focusing on health and wellness is a primary concern.

Seventy-six percent of those who are financially independent, i.e. with enough savings that they would not need to work, think retiring earlier will help them live longer. Seventy-two percent of those who are financially independent say health is a motivator to retiring early, but 28% say health is a barrier to retiring early.

Asked what their concerns are about retiring early, 53% of Americans say outliving their money, 46% say unexpected costs for a health emergency, 35% say the economy or their investments changing for the worse, 33% say Social Security changing, 29% say inflation, 19% say unexpected costs to care for family members, 19% say long-term costs for family members and 18% say boredom.

As to the factors that Americans think are keeping them from pursuing financial independence, 57% say health care costs, 38% say uncertain market conditions, 35% say inflation, 34% say longevity, 26% say uncertainty as to whether or not they will receive Social Security benefits, 20% say long-term care costs for a family member, 18% say unexpected death or care for a family member, and 16% say lack of financial knowledge.

Asked what kind of retirement savings they have, 50% say an employer-sponsored 401(k), 50% say a traditional individual retirement account (IRA), 34% say a Roth IRA, 24% say annuities, 15% say a health savings account (HSA), 12% say a solo 401(k) and 4% say a 457 plan.

Seventy-six percent of Americans say they plan to cover health care costs in retirement via Medicare, 51% through supplemental health care insurance, 42% say health insurance, 41% say Social Security and 9% say an HSA. Forty-four percent say Medicare will cover the bulk of their retirement medical expenses.

The Harris Poll conducted the online survey of 1,503 adults age 45 or older with more than $250,000 in investable assets between September 28 and October 6, 2018. The report can be downloaded here.