Wednesday, April 18, 2018

Do Your Clients Have a Plan to Pay for Health Care in Retirement?

By Nick Bates, Vice President of Annuity Sales

As a financial professional (FP), you have likely talked to many clients about saving for retirement in order to plan for income that will cover their basic living expenses. In most cases clients can make a fairly accurate estimate of what their costs for housing, food, and taxes will be when they plan to retire. If they can do this, they can plan reasonably for the amount of income they will need to cover these expenses. However, there is one other category of living expenses whose cost may be considerably greater than your clients would predict: health care.

According to a study of retirement health care costs conducted by Fidelity Investments, a retired couple, both aged 65, can expect to spend an estimated $245,000 on health care throughout retirement.[1] For many clients, this number will be a big surprise, as a lot of them probably think once they turn 65 they will be covered by Medicare. The federal government’s Medicare program can help make health care costs more predictable in retirement, but this comes at an expense to the client. Your client may be required to pay an ongoing monthly premium for Part B, Part D, and supplemental insurance coverage. Another thing for your clients to keep in mind is that Medicare doesn’t cover all health care costs. They will have to pay out-of-pocket for expenses such as deductibles, co-pays, hearing, vision, and dental as well.

Many carriers that Ann Arbor Annuity Exchange works with have great client-approved marketing pieces that can help you explain to your clients the need to plan for the cost of health care in retirement. Other approved client pieces talk about the rising cost of health care. In the same Fidelity study mentioned above, between 2005 and 2015 health care costs for the same 65-year-old couple increased 29%.

Once you have opened up your clients’ eyes to the need to plan for another major expense during retirement, let’s offer them a solution. As an insurance licensed FP you have many possible solutions at your disposal to offer your clients. Ann Arbor Annuity Exchange can help you identify what solutions may fit your clients’ needs to provide lifetime income to cover health expenses. We are always here to help – please call Ann Arbor Annuity Exchange at 800.321.3924.

Nick Bates | Vice President of Annuity Sales
Ann Arbor Annuity Exchange
Ph: 800.321.3924 x121 | Dir: 734.786.6121

[1] “Health Care Cost for Couples in Retirement Rise to an Estimated $245,000” Fidelity. 7 Oct 2015. Web. Accessed 16 Aug 2017 at

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