Retirement Benefits vs Health Benefits Satisfaction

Between 1946 and 1964 some 78 million babies were born, becoming known as the “baby boomer” generation. Over that 18 year period they hit every stage of life together, industries were created and fortunes were made as companies positioned and re-positioned themselves to serve this demographic.

Baby boomers bought mouse-ear hats to wear while they watched “The Mickey Mouse Club”, they wore Coonskin caps while watching Wald Disney’s TV specials about Davey Crockett, they collected hula hoops, Frisbees, Barbie dolls and bought rock and roll records, danced along with “American Bandstand” and swooned over Elvis Presley.

Just as these people were born within 18 years of each other, they will retire within 18 years of each other. There’s a very real possibility they could spend as many years in retirement as they did in the work force. Many will be looking at an encore career to help supplement their retirement. A recent Towers Watson survey found that two-thirds of respondents (67%) say they are satisfied with their employer-sponsored retirement plans, including defined benefit plans.

Conversely, the number of employees who are satisfied with their health care benefits has declined from 69% in 2007 to 59% in 2013. The survey cited rising cost as a key factor fueling the decline, with the most pronounced dissatisfaction among older workers and those in poor health. In addition to rising health care cost another key factor was with the cost employees must pay, 38% satisfied versus 53% in 2007, for premiums and out-of-pocket expenses.

Has the economic uncertainty or corporate cutbacks caused a change in your confidence that your health care will be affordable in retirement? Would you give up some of your pay at work for a guaranteed retirement benefit that included health care? The survey found that employees were significantly less willing to sacrifice pay for health care benefits, with 35% saying they would not give up some pay for more predictable health benefits while a smaller percentage (27%) would be willing to take a larger amount from their paycheck in return for more generous health care benefits.

One thing is for sure, as we age we tend to get less healthy rather than healthier, and this change comes at a time when costs will be consuming a significant share of your household, fixed budget in retirement. So you have to ask yourself, has retirement security become more important to you as you approach this next phase of your life? Is the importance of security more pronounced as you age than when you were growing your family or building your career?

Maybe now is the time to meet with your trusted advisor to get help in your efforts to ensure a comfortable and financially secure retirement, for you and for your spouse. The baby boomer generation is the most studied generation in history; the events that will happen in retirement are predictable and manageable, with proper planning.

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