According to a recent survey on planning for retirement, the respondents indicate they concentrated on finances, but spent virtually no time on health benefits. The survey results also showed the 1,000 respondents are vastly underestimating health care expenses that would be incurred in retirement. In fact, 52 percent of those surveyed expect to spend less than $300 a month on out-of-pocket costs and health care-related expenses, which is less than half of what the average retiree actually spends.

In some ways, the survey results shouldn't be a big surprise, because most of us concentrate on building up our qualified retirement plan balances. With employer-provided medical plan coverage for many, the actual cost of medical expenses isn't really a concern for a number of people other than the deductible plus the amounts that aren't otherwise covered by insurance.

You, as financial planners and trusted advisors, are the ones who will most likely have to raise this issue for those facing retirement. If they are lucky, and it is increasingly rare these days, their employer-provided plans will continue covering them after retirement. Another possibility is a part-time job that has medical coverage or possibly obtaining coverage though a group plan of an organization they belong to as a member. If need be and if possible to cover existing conditions, an individual policy might be an expensive alternative that can be selected. Medicare gap policies and long-term care insurance will also have to be considered.

As a starting point to obtain needed information and to increase client awareness, you can include questions on anticipated payment of medical expenses in retirement planning questionnaires that you have your clients complete. This will make raising this issue in later discussions with them much easier.

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