Wealthy retirees see cost of health care as the Wild Card in retirement

By Dian Vujovich

Funny thing about money, retirement and health care: Even when there is plenty of money around it can’t buy good health. Or, a worry-free retirement.

David Baxter is a senior vice president at Age Wave. It’s  a California-based company that focuses on the behavior of folks over the age of 50.  Recently Age Wave and Merrill Lynch teamed up for a study titled,  “Americans’ Perspectives on New Retirement Realities and the Longevity Bonus”. In  it they interviewed ML clients who had  over $250,000 in investable assets.

During a  telephone conversation with Baxter,  I asked him what the biggest concern facing those interviewed  was expecting  him to answer ” money”.

I was wrong.

“It’s a good question,” says Baxter who has been with Age Wave for 15 years.” Certainly having enough money to go the distance is a major concern especially with the rising longevity, so having enough money to last all of those years is certainly top of mind. But what we find is that the chief concern that people have regarding retirement is how can they pay for health care.”

Baxter said the cost of health care is the number one wild card when it comes to approaching retirement. “Health care is kind of a triple whammy because not only can the cost be devastating but it’s often very unpredictable. So while you might be able to anticipate how much money you might need in retirement, it is when and how much health care might cost that is very hard to predict.”

Not included as part of this study but sticking to that health care subject, he added that the biggest health concern worrying the 50+ crowd is Alzheimer’s.

“What I’ve seen in my past research is when we ask, “What are you most concerned about in later life?” Alzheimer’s is the top concern.  And that’s understandable as it’s obviously devastating personally and for one’s family as well.”