Health Concerns Pose Challenges for High Net Worth Retirees

Health concerns top the list of personal issues affecting high net worth investors – and for good reason. Industry experts say rising health care cost threaten the retirement security of the baby boomer generation – even its most affluent members.

A healthy 65-year-old male can expect to pay a total of $350,000 in health care costs for the rest of his lifetime, reports the Insured Retirement Institute in a new report examining the effects of escalating health care costs on retirement savings. A 65-year-old female counterpart can expect to pay at least $417,000 – 13 percent more than a comparable male. The average Medicare recipient will face more than $4,300 in out-of-pocket medical expenses.

“Health care costs are one of the biggest concerns for Boomers as they enter retirement and is also one of the largest threats to Americans’ overall retirement income security,” said Cathy Weatherford, president and chief executive officer of the Insured Retirement Institute or IRI, in a statement. Weatherford urged investors to “properly plan for retirement and to consult with an advisor to ensure they will have enough money to cover health care costs and other necessary expenses in retirement.”

In the 12-month period ending September 2011, alone, per capita health care costs rose by 5.57 percent, according to the IRI, which reports that 72 percent of Americans ages 50 to 54 “lack full confidence” in their ability to cover medical costs in retirement.

These rising costs worry even extremely affluent investors, those ultra high net worth individuals who have investable assets of $5 million to $25 million. The majority of high net worth investors rank health concerns at the top of the list of personal financial planning issues. More than half (53 percent) worry about the financial consequences of a family health catastrophe, according to a Millionaire Corner study conducted in the first quarter of 2011. The health of a spouse worries nearly 60 percent of high net worth investors, and 56 percent say they are worried about “my own health.”

Health concerns, not surprisingly, rise with age, according to Millionaire Corner research that shows that nearly 60 percent of high net worth investors age 65 and older worry about the financial implications of a family health catastrophe and 47 percent worry about having someone to care for them in their old age.

Significant numbers of high net worth investors are discussing their health concerns with their financial advisors. About one-fifth of high net worth baby boomers are receiving advice about planning for long-term health care costs to help assuage their personal health concerns.

If you are looking for an advisor to help you plan for your long-term care costs go to Millionaire Corner's Find a Financial Advisor.