An overview of healthcare risks in retirement

Abstract

The report's key findings are: - Uninsured healthcare costs in retirement can be substantial, so older households need a good understanding of the potential risks. - New survey results of households with $100,000 or more in investable assets show that many underestimate their needs and know little about the costs of medical or long-term care services. - In contrast, financial advisors have a better sense of needs and costs, but households with advisors do not seem to know more than those without. - As a result, many retirees may not protect themselves against health shocks, forcing them to make difficult changes to cover shocks when they do occur. - Specifically, the majority of the survey respondents say they would spend down to Medicaid and preserve their home equity. In reality, many households end up tapping home equity and only a minority end up on Medicaid.