Products October 5, 2021

HSA Bank Unveils Retirement Healthcare Cost Calculator

The tool is designed to show employees the benefits of using a health savings account to prepare for medical expenses in retirement.

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HSA Bank, a division of Webster Bank, N.A., announced that it has launched a new tool, the Retirement Healthcare Cost Calculator, to help employees plan for health care costs in retirement.

The calculator, hosted by HealthView Services Inc., was designed to help employees understand how health savings accounts (HSAs) can aid in preparing them for meeting medical costs in retirement.

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The 2021 HSA Bank Health & Wealth Index found that 93% of consumers over age 55 worry about current or future medical bills, and, of those consumers, more than one-third reported that they rarely save money for future health care expenses. HealthView Services, in a recent study, estimates that a healthy, average 65-year-old couple, retiring this year, will go on to spend $662,156 on health care.

HSA Bank describes the calculator as a simple, user-friendly retirement planning tool that offers employees a personalized recommendation for how to maximize their HSA savings, with health care spending in retirement in mind. The tool uses 530 million data points taken directly from medical claims, along with the individual employee’s input, to provide an estimated health care cost projection for retirement. This will demonstrate the long-term benefits of using an HSA as a retirement savings vehicle rather than just a spending account, the bank says.

“Retirement health care costs are substantial, but HSAs are an excellent tool to help Americans prepare for future expenses while taking advantage of tax benefits,” says Ron Mastrogiovanni, president and CEO of HealthView Services. “Recent studies have shown that over 90% of account owners don’t invest their assets, but HSA Bank’s newest approach will educate and motivate participants to offset current and future health care costs through HSA investing.”

“There continues to be a gap in education about HSAs, especially about how employers can help their employees save for health care costs in retirement,” says Jason Kessler, senior vice president, director of product management at HSA Bank. “It’s critically important that more Americans understand what they can expect to face in terms of health care costs not covered by Medicare. We believe that this new calculator will help provide peace of mind and financial security for consumers up to and into retirement.”

Products October 5, 2021

Club Vita Shares Its Longevity Risk Analytics With NISA’s Clients

A more accurate estimate of longevity will help DB plans implement a better risk management strategy, the partnering providers say.

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Club Vita, a provider of longevity analytics, and NISA Investment Advisors have announced a strategic relationship, which will give access to Club Vita’s longevity risk analytics to NISA and its defined benefit (DB) plan clients.

Club Vita expands on the typical longevity rating factors of gender and affluence by capturing lifestyle, via using the ZIP+4 model. The firms say the lower the interest rate environment, the greater the cost of misestimating pension plan participants’ life expectancies.

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The two firms say that, over the past decade, understanding longevity patterns and trends has become a more significant challenge as most corporate pension plans have aging populations following their closure to new participants. The historically low-interest-rate environment coupled with evidence of increasingly different experiences of socio-economic groups has only increased the demand for more insightful longevity analytics.

“Understanding longevity risk is a vital part of a pension plan’s risk management strategy,” says David Eichhorn, NISA’s CEO and head of investment strategies. “Access to leading-edge longevity analytics will allow us all a better understanding of our clients’ plan-specific demographics. Whether the plan sponsor’s end goal is termination or hibernation, avoiding the misestimation of longevity is crucial to a smooth strategy execution.”

Through Club Vita’s analytics, NISA clients can tailor their existing mortality assumptions, seek to refine their cash flow projections, and improve the effectiveness of hedging strategies in place to manage investment risk. In addition, the objective of the analytics is to reduce the information asymmetry between NISA clients that are considering annuity purchases and life insurers.

“Our analytics enable pension funds to adopt the best practice risk management techniques of life insurers, including making informed decisions on risk transfer annuity purchases,” says Dan Reddy, Club Vita’s U.S. CEO.

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