Skyrocketing health care costs will have dire consequences on retirement and other savings, according to a new report on workplace benefits. But, ironically, trying to manage those costs is seen as a boon to financial advisors.
According to Bank of America Merrill Lynch’s 2017 Annual Workplace Benefits Report supplement, A Closer Look at Healthcare, employees rank retirement and health care as the two top benefits they receive. But 79 percent of employees — from millennials to boomers — have seen increases in health care costs, up from 69 percent in 2015.
As a result, more than half (56 percent) of employees say they spend or contribute less to other financial goals. For example, 63 percent are saving less for retirement, 48 percent aren’t paying down as much debt, 39 percent are contributing less to investments, 27 percent are saving less for college and 24 percent aren’t contributing as much to health savings accounts.
What’s more, 54 percent feel that retirement-related health care costs and insurance information is overwhelming, 49 percent say it’s confusing while 36 percent are frustrated.
What to do? Employees want the bosses to provide more financial advice in the form of increased access to financial advisors, education that’s geared to their age or financial situation, and financial training and education. Specifically, more information about health savings accounts, increased financial know-how geared to health care choices and advice about all financial needs are key, according to the survey.
Help with health care decisions and finances ranks high, with 50 percent needing help with Medicare and supplement plans. Other needs include long-term care (49 percent) and 38 percent saying they need advice on how much should be saved for health care needs in retirement.
More than 1,200 respondents took an online survey in the fall of 2016. They were required to be enrolled in a 401(k) plan but the plan didn’t have to be with Bank of America and the bank was not revealed as the survey sponsor.
Respondents were 52 percent women and 48 percent men. The biggest group was Gen Xers (460), while 427 were boomers and 355 were millennials.
Terry Sheridan is an award-winning journalist who has covered real estate, mortgage finance, health care, insurance, personal finance, and accounting and taxation issues for newspapers, magazines, and websites. A Chicago native and former South Florida resident, she now lives in New England.