Almost two-thirds (60 percent) of Americans are concerned about how they will pay for healthcare expenses in retirement, according to a study by financial services firm Edward Jones.
The report, which interviewed more than 1,000 non-retired and retired Americans, revealed a strong variation in the level of concern between age groups. Baby Boomers, the most recent generation to enter retirement age, were the most worried about covering the cost of healthcare, with 69 percent of those polled indicating that they are concerned, and 41 percent suggesting that they are "very" concerned. This is a striking difference from millennials: only 19 percent of whom were "very" concerned.
"Healthcare expenses can be difficult to project, especially when you are decades away from retirement," said Scott Thoma, principal and investment strategist for Edward Jones. "Unexpected conditions and medical expenses that manifest later in life pose a great threat not only to physical and mental health, but also to the financial well-being of both the care receiver and the caregiver. That's why it is critical to start preparing early. Proactive planning can ultimately help individuals protect their assets over the long term, even if health complications emerge during retirement."
The study also found that four out of ten Americans (43 percent) know someone personally who had or is currently dealing with Alzheimer's disease. This number varied significantly between age groups, with one in three millennials (33 percent) knowing someone who has been affected by the disease, compared to half (51 percent) of Baby Boomers. This is likely due to the fact that the greatest known risk factor for the disease is increasing age. Alzheimer's, the most common form of dementia, is one of the most devastating health concerns facing retirees.
"The cost of Alzheimer's disease is staggering, not only from a human standpoint, but from a financial one as well," said Beth Kallmyer, vice president, constituent services, Alzheimer's Association. "According to the '2016 Alzheimer's Disease Facts and Figures Report,' out-of-pocket spending for health care for people with dementia, including Alzheimer's, is more than three times the out-of-pocket expenses for people of the same age without dementia."
"Very few people are prepared for the cost of caring for someone with Alzheimer's or dementia, which is one of the costliest — and most common — diseases affecting seniors," Kallmyer said. "The findings in the Edward Jones study are consistent with what we hear from baby boomers every day and underscore the need for families to include future health care costs in their long-term financial planning."
Edward Jones recently partnered with the Alzheimer's Association in an effort to support awareness of the disease and advance research, committing $4.7 million to support the cause. Funding through the partnership will enhance the Association's care and support programs, including the 24/7 Helpline (800.272.3900) and provide educational materials on brain health as well as funds for critical Alzheimer's disease research and grassroots awareness activities.
