Despite the advice they may be getting from their financial advisors, a new Issue Brief from the Center for Retirement Research at Boston College shows that older households tend to underestimate their healthcare risks in retirement and have very little sense of how much medical shocks or long-term care services may cost.
Why it matters: A survey of individuals between the ages of 48 and 78 found that their biggest retirement fears are high and rising prices (47 percent) and political instability (47 percent) while long-term care affordability ranked fifth overall at 33 percent.
Go deeper: In a separate survey. financial advisors felt LTC affordability or covering medical costs are the biggest risks their clients face to ensuring a secure retirement.
- Almost three-fifths of advisors believe that LTC affordability is a major risk compared to just 33 percent of older households.
The bottom line: The implications of older households underestimating healthcare risks are that many may have to make substantial adjustments or consider unpalatable options.
