Which Kind of Health Care Advisor Will You Be?

Medicare is an expected cost, and planning for long-term care is prudent, but clients should also prepare for unexpected expenses. In other words, help your clients prepare a cushion, and it should be larger than what you initially estimate. Even for wealthy clients, a three-day stay in an out-of-network hospital can quickly top $50,000.

Planning ahead for the full expanse of possible health care needs, from a major hospital stay to long-term care, gives clients peace of mind that their retirement strategy covers all the bases.

2. Offering more customized consulting

The second approach is to consider health care advice as a competitive differentiator and offer customized advising services to clients on top of basic fiduciary advice.

In other words, the second approach includes all the considerations of the first approach, but also helps clients select a Medicare and prescription drug strategy, time the move onto Medicare and evaluate the most tax-advantaged strategy across Health Savings Accounts and other retirement accounts.

These are more than a dozen different Medicare strategies, and choosing the wrong one can cost your clients thousands of dollars per year. The same goes for prescription strategies, especially if your clients are on multiple or specialty drugs. To further complicated matters, most Medicare plans change their coverage networks and drug formularies yearly.

For clients retiring early, finding coverage option to bridge the gap before Medicare eligibility is key. For others, it will make more sense to continue working past Medicare eligibility. And what about spouses and adult children?

The need is there, and good advice is hard to find. Insurance is full of jargon and complicated comparisons that most wealth management clients would prefer to outsource to a trusted consultant. This is where financial advisors come in, and aside from providing a much-needed service, health care dovetails with existing retirement planning services.

For advisors who want to take the hands-on approach, there are several options for offering this customized advice to clients. Firms can build out their health care expertise in-house, or partner with a local insurance brokerage or team of health care advisors. You can think about health care advising like a continuum, and the more customized services you want to provide, the more it may make sense to develop a relationship with an outside health care partner.

But regardless of where your practice decides to fall on the continuum, integrating health care costs into comprehensive retirement planning is increasingly necessary for your clients' well-being.

— Read Completing the Retirement Planning Puzzle: Where Long-Term Care Fits In on ThinkAdvisor.

Ryan McCostlin is part of the individual advisor team at Bernard Health.