Securing a comfortable retirement has long been a cherished goal for Americans. As 2024 sets a new record for retirement in the US, with an average of 11,000 Americans turning 65 daily, retirement is becoming a reality for many. However, as life expectancies rise and healthcare costs soar for Americans, addressing healthcare costs in retirement has become a pressing concern for clients and their advisors. Achieving a blissful retirement could be derailed without a comprehensive plan and the necessary tools to effectively plan for and manage healthcare costs and needs during retirement.
The Impact of Rising Health Care Costs
Many mistakenly assume that Medicare will cover all their healthcare expenses during retirement. While Medicare does cover some medical costs, it does not cover everything, leaving retirees responsible for Medicare premiums and various out-of-pocket expenses. These premiums are likely to increase over time, alongside the continuous surge in health care costs. The escalating costs of prescription drugs and medical treatments further burden retirees financially. Failing to account for the disparity between health care costs at the onset and conclusion of retirement can significantly impact overall retirement security if not carefully anticipated and planned for.
The Complexities Around Health Care Planning
Healthcare planning is important for all ages, whether for someone in a household or for those looking to invest in tax-optimized ways for future healthcare expenses. As retirement planning becomes increasingly intertwined with healthcare considerations, individuals are seeking guidance from financial advisors to navigate this intricate landscape. However, due to its complexity, addressing healthcare needs in retirement presents challenges for investors and advisors.
Calculating healthcare costs involves numerous variables, such as the client's health status, inflation and rising healthcare costs, all subject to change. Determining funding against these constantly changing factors is often manual and time-consuming. Portfolio management tools typically don’t factor in existing and anticipated healthcare expenses. Conventional decumulation strategies like “The 4% Rule” do not adequately account for healthcare cost inflation. Many existing solutions are disjointed and lack the personalized insights investors require.
A Single-Solution Approach
Given the complexity of these factors, adopting a holistic approach that integrates comprehensive tools for planning and management is essential to effectively meet healthcare needs and ensure long-term financial security in retirement.
Introducing SS&C HealthHub, your comprehensive tool for health care planning. HealthHub puts everything you need at your fingertips, offering an integrated, personalized solution that covers all facets of health care planning. This includes addressing pre-existing health conditions, long-term care expenses, Medicare premiums and geographic considerations. Utilizing an AI-driven personalization engine, HealthHub tailors recommendations based on age and individual interests. By replacing inefficient, manual and disconnected tools traditionally used in the industry, HealthHub seamlessly meets the intricate demands of advisors and clients.
HealthHub helps advisors and investors by:
- Empowering investors and advisors to make informed healthcare decisions by addressing complex topics.
- Enabling investors to plan with confidence for their future healthcare needs.
- Meeting the demands of both advisors and investors with a streamlined, efficient solution.
Addressing health care needs in retirement often presents challenges for advisors and investors alike when it comes to planning, investment and decumulation. Health Hub provides reliable healthcare cost projection that empowers clients to make informed decisions today for peace of mind tomorrow. To learn more about SS&C’s HealthHub solution, download our "SS&C HealthHub" brochure.
