PANC 2022: Health, Wealth and Retirement

PANC 2022: Health, Wealth and Retirement

“I think we can all agree that health care is the biggest cost of retirement, so why stop working [health care] Who talks about retirement planning? asked Priya Dantine, advisor and chief operating officer of ProCourse Fiduciary Advisors, LLC, and director of one of the committees at the 2022 National Conference PLANADVISER in Scottsdale, Arizona.

The question for counselors, she said, is, “We’re really retirement experts, do we need to be healthcare experts too?” She said employees are not considering healthcare in retirement. They think about their current cash flow needs. So how do counselors start the conversation about saving for retirement health care expenses?

Chris Ceder, vice president, president of retirement and financial wellness programs in the Americas at Goldman Sachs Asset Management, notes that health care benefit offerings have changed — that is, there are more high-deductible health plans. Current health care costs affect employees’ ability to save, and in retirement, these expenses will increase as employees get older. “Health care is linked to the financial well-being of employees, which is important for employers,” he said. “We need to have a conversation about healthcare with the staff.”

Kevin Takinen, a 401(k) and Financial Wellbeing consultant at Sequoia Consulting Group, said that given the needs for employees to offload and the fact that health care costs for retirees are expected to exceed $300,000, saving in a health savings account is just as important as saving in a plan specific contribution. “Many employees don’t include healthcare savings in their retirement planning. They think about current healthcare costs. Ceder agreed that savings for healthcare conversations can be linked to financial wellness. We need to help them figure out where they want to be tomorrow,” he added. “.

One thing counselors need to tell participants, according to Dantin, is Medicare. “Many employees think Medicare covers health care in retirement — and that it’s free,” she said.

However, advisors don’t need to be healthcare experts, Takinen said. “It is important to develop partnerships,” he said. “Understood that [plan sponsor] Clients need to balance their benefit spending, and counselors should ask to speak to their clients’ healthcare intermediaries. Counselors should talk to plan sponsors about all of their benefit offerings.”

Dantine added that it’s a good idea for third-party officials to get into the HSA business. “Employees need help getting everything together, and it is important for consultants to build partnerships,” she said.

Cedar said it’s important to talk to customers of plan sponsors and their service providers about designing their HSA plan. “Do you want HSA to only be blessed with discount compensation? If so, that might not give employees the opportunity to save.” “Advisors can work with client benefit brokers in designing the plan.”

Takinen said partnering with HSA providers and educating plan sponsors and participants can start good relationships for the advisors’ future businesses. Consultants have the opportunity to show employees how their money is being allocated. “For example, save in a DC match plan, put the savings into an HSA, and if anything remains, defer to Roth’s retirement plan,” he said. This can also help planning sponsors to maximize their advantage.

Dantin noted that HSAs can also help plan for sponsors who may have trouble passing the DC plan’s nondiscrimination test. Highly paid employees can put extra savings into HSA, and still save for retirement.

HSA dollars can also be invested. Takinen said advisors can help make HSA investing uncomplicated. “It’s an extra opportunity to educate, share and help,” he said. “Start by building goodwill; it can lead to a revenue stream.”

When asked how consultants should advise those employees who don’t have access to an HSA, Ceder said these employees just need to increase their regular savings. They should think about their savings in shovels – savings for living expenses, savings for health care, and savings for non-essentials, for example, Takinen added.

Dantine noted that efforts are underway to Separate HSAs from High Discount Health Planswhich will make these compounds available to many people.

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