Here’s why any discussion about retirement readiness must include planning for healthcare expenses
- End-of-career salaries will drive overall compensation budgets.
- Retirement incentive packages, often with prolonged insurance coverage under the active health plan, will increase medical risk and costs.
- Traditional defined benefit benefits will not be sustainable as a larger and longer-lived generation becoming eligible for this benefit.
- End-of-career Baby Boomers are looking for greater income protection in retirement.
- Retirees will absorb the inevitable cost shifting of Medicare and Social Security.
- Delayed retirements will drive significant opportunity costs for program renewal.
Solutions are needed in both working years and in retirement – for both participants and institutions.
Setting aside even small amounts of savings into a tax-advantaged health savings vehicle during the working can go along way toward helping employees achieve retirement readiness. It also helps employers by eliminating pay as you go benefits in retirement, and lowering active health insurance rates as more employees are able to retiree on time with peace of mind.