Concerns about health care costs may be causing retirees to cut back on spending and place limits on their retirement lifestyles, according to new research.
Healthcare costs are a top concern for the 60- to 70-year-old group of Americans participating in a new study by eHealth and Retirable. The results of a survey of more than 520 people, some already retired and enrolled in Medicare, and some not yet, were released Thursday.
“We find that…relatively few people save anything specifically for the medical costs they will likely face in retirement,” the report's authors said. “As a result, many people are so worried about unpredictable medical costs that they cut back on spending and limit their retirement lifestyles.”
eHealth is an online private health insurance marketplace and Retirable is a platform offering products and services related to investing, planning, spending and retirement protection.
63% of respondents cited health care as their top retirement concern, and 58% cited lack of funds as their top concern. 55% said they are spending less than they otherwise would because of concerns about health care costs.
Despite concerns about health care costs, only 33% of currently retired participants have or plan to save money specifically to cover medical costs they may face in retirement. I answered yes. Among those who have not yet retired, only 38% say they are saving or are saving specifically to cover their medical expenses in retirement.
17% of all survey respondents said they were “very satisfied” with their current financial situation, and a further 52% said they were “satisfied.” However, only 42% of currently retired people say they think they will have enough money to survive into retirement, and the number is even lower for those who have not yet retired. It was 29%. Additionally, 21% of respondents said they have no retirement savings at all.
Perhaps even more worrying is that many respondents may be underestimating the amount of money they may need in retirement. 46% of respondents calculated that they needed between $2,500 and $5,000 a month to live comfortably in retirement, and a further 24% said they needed between $1,000 and $2,500. The answer is yes. 18% said they needed between $5,000 and $7,500, and 5% said they needed between $7,500 and $10,000. On either side, 3% said he needed less than $1,000, and the same percentage said he needed more than $10,000.
Click here to learn more about the results.
