More retirees are losing confidence in their ability to afford healthcare expenses, especially as artificial intelligence (AI) developments extend lifespans, finds a new report by the Nationwide Retirement Institute.
The Health Care Cost in Retirement survey, released today, finds that 59% of respondents lack confidence in their ability to pay for health care costs as they age, and 57% worry in their ability to pay caregiving costs for their partner or spouse.
These challenges are further aggravated by potential medical advancements brought on by AI features, reports Nationwide. Twenty-six percent of Americans anticipate AI advancements in healthcare to add over a decade to their lifespan. Specifically, Gen Z expect AI to add an average of 15 years to their life, compared to 12 years for Millennials, eight for Generation Xers, and nne years for Baby Boomers.
“Advances in AI and healthcare technology in general are moving faster than ever and may help treat many of today’s chronic diseases, as well as other health issues,” said Kristi Rodriguez, senior vice president of the Nationwide Retirement Institute, in a statement. “While this is good news, longevity requires more planning. That is why it is so important to consult with a financial professional to create a plan that prioritizes your health care needs now and for a retirement that could be longer than anticipated.”
Delayed procedures to afford costs
Rising inflation and healthcare costs have also caused some adults to postpone medical procedures, physical exams, or renew prescriptions in the past 12 months.
For additional savings, 10% of Americans are considering downgrading their health insurance plan due to inflation, including 19% of Gen Z respondents, 11% Millennials, and 14% of Gen Xers. Another 60% of adults say they would choose a health insurance policy with a lower premium but a higher deductible for a cheaper monthly payment.
“Advances in AI and healthcare technology in general are moving faster than ever and may help treat many of today’s chronic diseases, as well as other health issues. While this is good news, longevity requires more planning.”
Kristi Rodriguez, Nationwide Retirement
Others are completely forgoing any emergency savings—51% of respondents said they could not pay off an unexpected $5,000 healthcare out-of-pocket expense.
These challenges only incite more fear in workers and retirees alike, as 66% say they are terrified of what healthcare costs can do to their retirement plans. Seventy-two percent of Americans have also stated that one of their top fears in retirement is not being able to control their healthcare expenses, found Nationwide.
When working with a financial professional, Nationwide states that close to three-quarters (72%) of respondents want help understanding Medicare coverage, as 70% answered incorrectly when asked basic questions about the federal program, how Medicare Part B workers, and cost considerations for different Medicare plans.
Other respondents need more guidance in estimating the average cost of healthcare in retirement—participants who were asked about its costs in 2022 reported an average of $55,343, yet the actual cost was almost triple that at $172,500 for an individual or $315,000 for a retired couple.
“Our survey shows that Americans need more knowledge, guidance, and ongoing support to make informed decisions about their financial plans,” added Rodriguez. “By incorporating health care into financial planning conversations, financial professionals can help clients better prepare for the rising costs of health care.”
SEE ALSO: