Think you are Prepared Financially for Retirement? Think Again!

Industry experts agree that most employees aren’t saving enough in their company-sponsored retirement plans and their health savings accounts (HSAs) to meet their retirement goals. It’s also likely that some are shutting their eyes to the long-term cost implications of their health conditions and lifestyle.

It’s hard to overestimate the potential burden of health care costs during retirement years. A couple with an average level of drug expenses will need approximately $270,000 to cover medical costs throughout retirement.[1] Yet, 45 percent of people between ages 36-45 are at risk for being unable to pay for basic living expenses and out-of-pocket health expenses during retirement.[2]

People who suffer from certain health conditions today may have especially high medical expenses during their Cara Sjodinretirement years. For example, a woman who smokes, has high cholesterol and is obese may need as much as $150,000 more than a healthy nonsmoker for health care expenses in retirement.

New tools make it easier for individuals to see if they are on track to cover health care costs in retirement. The Health Savings Checkup (www.healthsavingscheckup.com), for example, lets people estimate future costs based on their current health status, financial situation, retirement savings and where they plan to live in retirement. It can even provide an estimate of how much Medicaid will pay toward future health care costs.

After filling in their information, individuals receive a report that estimates their health care costs in retirement and suggests how to make up any shortfall. The Health Savings Checkup makes it easier to see how quitting smoking, maintaining a healthier weight, reducing cholesterol or lowering blood pressure can affect a person’s medical costs in retirement.

In short, good health is like money in the bank. Employers through their health and wellness programs can help employees understand how their current lifestyle choices may affect their current and future health care costs.


[1] Based on 10,000 users of the Health Savings Checkup, 2012.

[2] 2010 EBRI Retirement Readiness Rating

About the Author

Cara Sjodin is Vice President, Health Wealth Advisor Services with Optum Financial Services, a UnitedHealth Group Company. She leads the consumer digital experience work and decision support initiatives to help people plan and save for their health care costs in retirement as well as helping people understand the health care cost impact of their lifestyle choices.  She has 20 years marketing experience in product manufacturing, financial and health care industries.  Prior to joining Optum, she held numerous marketing and field engagement positions with Ameriprise Financial and American Express Financial Advisors.  She began her career at Lifetouch in several product management and marketing positions.  Cara holds a BA degree in Speech/Communications from the University of Minnesota.

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