Financial Advisor Survey: Discussing Health Care Costs in Retirement Key to Retaining Clients

Financial Advisor Survey: Discussing Health Care Costs in Retirement Key to Retaining Clients

Clients are "terrified" but savvy advisors are helping them take action

COLUMBUS, Ohio--(BUSINESS WIRE)-- Discussing health care costs in retirement with clients is new territory for many advisors and too few say they have the knowledge and resources to do it well. However, according to a new Nationwide Financial survey released today, four in five advisors say they know if they can have these discussions, their clients will be more likely to stay with them.

"There are not enough advisors right now talking about future health care costs with their clients, but more will soon learn how - or risk losing customers to an advisor who can," said John Carter, president of distribution and sales for Nationwide Financial.

According to the Harris Interactive survey of 501 financial advisors, 57 percent of advisors say their clients are interested in talking about their health care costs in retirement. But more than half of advisors surveyed admit it is challenging to discuss information about their clients' health and only 30 percent say they are confident in their ability to estimate their clients' health care costs in retirement.

"Many advisors don't do taxes or wills. Often they work with partners that have the ability to do them or they refer their clients to an outside accountant or an attorney. But where do they send a client who wants to discuss health care costs in retirement?" said Carter. "While advisors don't sell health care or Medigap policies, they do need to help their clients create the income stream to pay for those costs."

Bring it up

According to our survey, 43 percent of advisors say their clients show little interest in discussing the subject. That could be because nearly three in four advisors say many of their clients don't seem to realize how crucial it is to plan for health care costs in retirement and, on average, more than half don't have a plan to pay for those costs.

Too often advisors take a passive role in health care discussions with reluctant clients. More than half of advisors say they remind their uninterested clients of the importance of the discussion before switching topics and 37 percent say they try to urge them to have the discussion before switching topics. Only four percent insist on having "the talk."

"Advisors need to have these discussions with their clients," Carter said. "Especially since 49 percent of the advisors we surveyed believe they could be liable for not properly preparing their clients for the costs of health care in retirement."

Retirees today face what may seem to be insurmountable challenges in paying for their future out-of-pocket health care costs. Out-of-pocket health care costs for the average 65-year-old couple can reach $240,000 over 20 years of retirement.1 And that doesn't even account for long term care. People living to age 65 have a 70 percent chance of needing some type of long term care in their lifetime.2 The average cost per year for a nursing home is projected to be $265,000 by 2030 - and that's not even for a private room.3

That's why it's important for advisors to take the initiative and bring up the topic of health care costs in retirement with reluctant clients. An aging nation needs our help understanding how out-of-pocket health care costs - including long term care - will affect their retirement. If plans are not made now, what's coming is a crisis for many Americans.

Solutions available

One of the problems that may be keeping advisors from having these discussions is that 43 percent say they do not have the proper solutions or proper tools they need to estimate health care costs in retirement.

"Currently, many advisors will use their clients' assumptions of their future health care costs to develop a retirement income plan," said Kevin McGarry, director of Nationwide Financial's retirement income strategies. "However, four in five clients underestimate their health care costs."4

To help simplify this complicated issue and encourage these discussions, Nationwide Financial launched the Personalized Health Care Assessment program to help advisors estimate their clients' health care expenses in retirement. The program uses proprietary health risk analysis and up-to-date actuarial cost data such as personal health and lifestyle information, health care costs, actuarial data and medical coverage to provide a meaningful, personalized cost estimate that will help clients plan for medical expenses.

"The good news is that advisors are seeking the knowledge and resources to better help their clients plan for health care costs in retirement," McGarry said. "It's much easier to have these difficult conversations when, instead of guessing, advisors can use a tool to provide a fact-based cost estimate based on their clients' health risk and lifestyle and build a plan from there."

"The assessment enables an advisor to take clients who are terrified about health care costs in retirement and turn them into someone who is confident."

Advisors can visit to learn more.


The 2012 Financial Advisors and Health Care Costs Study was conducted online within the U.S. by Harris Interactive on behalf of Nationwide between July 18 and July 25, 2012. The respondents comprised a representative sample of 501 financial advisors with at least 50 percent of their clients having $250,000 or more in total investable assets. Results were weighted as needed by firm type. Respondents for this survey were selected from among those who have agreed to participate in Harris Interactive surveys. Because the sample is based on those who were invited to participate in the Harris Interactive online research panel, no estimates of theoretical sampling error can be calculated.

About Nationwide

Nationwide Mutual Insurance Company, based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the U.S. and is rated A+ by both A.M. Best and Standard & Poor's. The company provides customers a full range of insurance and financial services, including auto insurance, motorcycle, boat, homeowners, pet, life insurance, farm, commercial insurance, annuities, mortgages, mutual funds, pensions, long term savings plans and specialty health services. For more information, visit

Nationwide, Nationwide Financial, the Nationwide framemark, Nationwide YourLife and On Your Side are service marks of Nationwide Mutual Insurance Company.

1 Fidelity Investments, "The Increasing Cost of Health Care Upon Retirement," 2012
2 LTCI's Revolutionary Evolution, Nov. 1, 2011, Life Insurance Selling
3 Life and Health Advisor, "Don't Let Your Clients Get Blindsided By Unexpected LTC Costs," 2010
4 Nationwide Financial's Health Care Costs in Retirement consumer survey, 2012

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Charley Gillespie, 614-249-5701

KEYWORDS: United States North America Ohio


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