Finances, 401(K)'s and investment strategies are likely the first things to come to mind when many working-age adults think about retirement. But a new survey finds retirees think first about a different subject.
Finances, 401(K)’s and investment strategies are likely the first things to come to mind when many working-age adults think about retirement. But a new survey finds retirees think first about a different subject: Health.
The survey, from Merrill Lynch and the research and consulting firm Age Wave, found 81% of retirees list health as the most important ingredient to a happy retirement.
Financial health comes in second, followed by having a loving family and friends, and having purpose in life.
“For many, health can be the difference between a retirement of opportunity and independence or one of worry and financial challenges,” said Andy Sieg, head of global wealth and retirement solutions at Bank of America Merrill Lynch, in a press release announcing the survey results.
However, Sieg noted that “health” and “finances” are not 2 discrete categories.
“This research makes clear that the convergence of health and wealth should be factored into planning later in life,” he said.
The survey suggests that most people agree. However, that doesn’t necessarily translate into prudent planning. When Merrill surveyed American pre-retirees (those age 50 and above), they found healthcare costs topped the list of financial concerns. However, 70% of those surveyed hadn’t actually discussed how much they need to save to pay for healthcare during retirement.
One in 6 pre-retirees hadn’t attempted to forecast their retirement healthcare costs, with many saying the information available to them regarding cost forecasting is overwhelming, confusing or frustrating.
“Between unpredictable and costly healthcare expenses and unexpected early retirement due to health problems, planning ahead can be confusing and overwhelming,” said David Tyrie, head of retirement and personal wealth solutions at the bank. “People are increasingly seeking guidance to help them make informed decisions, for themselves and their families.
Medicare was another source of confusion. Only 7% of people ages 55 to 64 say they have a strong grasp of Medicare coverage options. Only 19% of current Medicare recipients said they have a sufficient understanding of the program.
The complete study can be viewed here.