Wellness for Life Survey Reveals 9 out of 10 Americans Significantly Underestimate Health Care Costs in Retirement

Mon May 13, 2013 10:34am EDT

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Wellness for Life Survey Reveals 9 out of 10 Americans Significantly Underestimate Health Care Costs in Retirement

Aviva USA and Mayo Clinic survey finds unrealistic expectations about health and finances

Americans may be stunned when they realize how big a financial bite health care may take out of their retirement savings.

According to the annual Wellness for Life survey of nonretired adults by Aviva USA, in collaboration with Mayo Clinic, nine out of 10 people expect to spend less than 20 percent of their monthly retirement income on medical and dental expenses. Seven out of 10 expect to spend just 10 percent or less. In reality, people should be prepared to spend approximately 30 percent of their income on health care expenses in retirement, according to The Urban Institute.

“These are staggering discrepancies between people’s perception and current reality,” said Dr. Philip Hagen, medical director of Mayo Clinic EmbodyHealth and vice chair of the Division of Preventive and Occupational Medicine at Mayo Clinic. “This survey revealed most Americans are unrealistic about some of the repercussions of lifestyle choices and aging – specifically, that as you get older, your health is apt to decline and your need for health care increases. That need for additional care also means there will be additional costs. Getting regular preventive care and improving lifestyle habits to decrease health risks can help reduce these expenses and improve health and quality of life.”

Many people seem ill-prepared for the expense. Only four of 10 people surveyed said they are, or will be, financially prepared for retirement. That statistic becomes even more concerning when you factor in how much people underestimate health care expenses in retirement, and that the cost of health care continues to rise.

Aviva USA and Mayo Clinic are working together to provide wellness benefits, resources and expertise to encourage better financial and physical health for Aviva’s Wellness for Life policyholders. Wellness for Life is a unique enhancement to a life insurance policy in the form of an optional rider that can reduce out-of-pocket premium costs over time when the Aviva client lives a healthy lifestyle.

“This survey reveals the opportunity that exists for people to rethink the role health and wellness plays in retirement planning,” said Chris Jones, chief marketing officer for Aviva USA. “Helping people improve their financial well-being and rewarding health-conscious behaviors of our policyholders are some of the reasons we created the Wellness for Life rider, which enables people to save money on their life insurance while also providing them access to wellness resources from Mayo Clinic.”

The second annual survey by Aviva USA in collaboration with Mayo Clinic focused on the tie between health, finances and retirement issues. Ipsos, a leading global market research company, conducted the survey of nearly 1,500 nonretired U.S. adults on their health habits and financial preparedness. The survey results revealed how unrealistic people are about their health and financial situation, and it illustrated how few people are doing some of the most basic things that could lead to improved health and a less-stressful financial future.

For example, Mayo Clinic recommends a minimum of 30 minutes of exercise a day, and additional activity throughout the day to reduce overall sedentary time. Two out of three people surveyed exercise less than two hours per week. And yet, four out of five of those people who are not getting the minimum recommended amount of exercise expect their health to stay the same or even improve in retirement.

Among some of the other key health care-related findings were:

  • One in six survey respondents said they go to the doctor less frequently than once every two years.
  • Only one in eight Americans say they are currently unhealthy, including just one in 60 who say they are very unhealthy. However, more than 35 percent of American adults are obese, according to the Centers for Disease Control and Prevention.
  • Almost half of survey respondents (46 percent) said their weight has increased somewhat or a great deal compared to 10 years ago. Just 16 percent said their weight has decreased.
  • Despite the trends of minimal exercise and increased weight, 23 percent of Americans expect their health to be improved in retirement.

“People need to take action now to improve their health in the short and long term,” Hagen said. “Ultimately, that can reduce their overall health care expenses and improve their quality of life.”

The survey suggests Americans need to take action to improve their financial health in retirement as well. One in three people surveyed don’t feel they will be prepared for retirement, and only half of those surveyed said they have a plan to achieve their financial goals.

The plans some have may be a bit shaky, based on the sources they are relying on for their financial future. Nearly half of the respondents expect Social Security to play a very important role in funding their retirement, while part-time work and home equity are listed by one in five as very important sources for retirement funding. Half the people surveyed said they sometimes get overwhelmed when they think about preparing their finances for retirement.

“We think it’s important to remember when planning for your retirement all the unique benefits a life insurance policy offers,” Jones said. “With Wellness for Life, we’ve linked physical wellness today to financial wellness tomorrow by encouraging consumers to take simple, powerful steps toward physical and financial health. It’s part of our commitment to putting people before policies. Speaking with a financial services provider is a great first step toward financial health.”

The Wellness for Life program rewards customers for seeing a physician regularly and for maintaining a healthy weight – two factors Mayo Clinic emphasizes as keys to enhancing well-being. Additionally, Mayo Clinic offers supporting resources and expertise to help Wellness for Life policyholders manage their health. Best of all, insurance costs can only go down with the Wellness for Life program and will never increase as a result of doctor visits.

More information about the survey and about Aviva’s Wellness for Life program can be found on avivausa.com.

About the survey
The survey was conducted Feb. 11-15, 2013. A national sample of 1,457 nonretired adults aged 18 and older were interviewed online. The sample was representative of the general U.S. population based on region, gender, age and household income data from the U.S. Census Bureau. Ipsos is a leading global survey-based market research company that helps interpret, stimulate and anticipate the needs and responses of consumers, customers and citizens around the world.

About Mayo Clinic
Mayo Clinic is a nonprofit worldwide leader in medical care, research and education for people from all walks of life. For more information, visit MayoClinic.com or MayoClinic.org/news.

About Aviva USA
Aviva USA is a sales leader of indexed life insurance and indexed annuities. Headquartered in West Des Moines, Iowa, Aviva USA also has offices in Topeka, Kan., and Melville, N.Y. Aviva USA has approximately 930,000 customers, employs 1,800 people across the country and can trace its presence in the U.S. back to 1896. Wellness for Life is not available in all states.

Aviva Media Contacts:
Kevin Waetke, Public Relations Director
Office: 515-342-3822
Cell: 515-782-3256
kevin.waetke@avivausa.com
or
Steve Carlson, Public Relations Manager
Office: 515-342-6403
Cell: 515-782-6317
steven.carlson@avivausa.com
or
Mayo Clinic Media Contact:
Ginger Plumbo, Mayo Clinic Public Affairs
507-284-5005 (days)
507-284-2511 (evenings)
newsbureau@mayo.edu

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