Moderators: Sharon Seifried, national vice-president for corporate accounts, group retirement solutions; and Fraser Wiswell, assistant vice-president for group retirement solutions, at Manulife Financial
With the decline of retiree benefits, rising drug costs and government funding constraints, plan members may not appreciate what their health-care costs will be in retirement, said Wiswell. “Plan members without benefits coverage in retirement will need to include ongoing health-care costs in their retirement income planning.”
Key takeaways:
❱ Help employees understand what their health coverage will be in retirement. Those with retiree health benefits are likely aware of the plan, but those without them may have no idea that private coverage will stop upon retirement. In some cases, people may suffer hardship and even delay retirement to keep their health benefits.
❱ Tools and calculators as part of full financial wellness plans can create awareness of potential health costs and help members prepare by showing the income replacement ratio needed to pay for them.
❱ There are various ways to cover health costs in retirement, including buying insurance products, self-insurance or savings. There’s no simple way, however, to determine what percentage of income someone needs to cover health-care costs.
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