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17th Annual Transamerica Retirement Survey

Why It Matters:
  • Major medical plan deductibles continue to rise.
  • Clients may overestimate their preparedness to handle major medical expenses.
  • Understanding the connection between your client’s wealth and health could help you better prepare them for the future.

Do you take your clients’ health into account when providing financial guidance? As it turns out, today’s clients are looking for a new breed of financial professional. Simply being a “numbers person” only goes so far.

The big picture

The quality of your client’s health could influence the quality of their retirement. Medical expenses – planned and unexpected – can certainly add up. Among workers who have taken a hardship withdrawal from their employer-sponsored retirement plan, 1 in 4 (24%) say the primary reason was to pay for medical expenses.

For 2018, preliminary analysis suggests some of the most popular Affordable Care Act insurance plans could see double-digit premium increases. In this uncertain environment, some clients may overestimate their ability to cover an unexpected medical emergency with savings, and that could be a costly mistake.

It’s hard to imagine waking up in the emergency room, let alone waking up in a financial state of dread before assessing your physical condition. Putting off planning for such nightmarish scenarios is only human nature. As a financial professional, you’re in a unique position to help clients form a plan for their long-term well-being.

Add it up

To start, you may want to suggest clients gather information from their insurance providers to see what’s covered and what isn’t, from a heart attack to a cancer diagnosis. How much money do they have in a health savings account (HSA), if any? What do their deductibles and other coinsurance costs add up to? Should they look into critical illness insurance or other supplemental protection?

Forecasting two or three worst-case scenarios could help clients form a clearer picture of where their health and finances intersect.

Form a plan

Once clients learn how they would handle a major medical emergency, the next step would be preventing it from happening in the first place. Up to half of all premature deaths in the U.S. are due to preventable factors like diet, tobacco use, and physical inactivity.

Here’s the thing: When you encourage clients to live long, healthy lives, you’re extending the life of your professional relationship. More so, acknowledging the larger wealth and health connection demonstrates a level of commitment that few financial professionals can provide — further separating you from the pack.

There are several numbers clients may want to keep tabs on if they want to envision long-term wellness. This article may help clients understand how to build a solid health foundation.

Things to Consider:
  • Clients are expressing a need for a more holistic approach to creating a long-term financial strategy.
  • Until clients realize whether they can/can’t handle a medical emergency, they may scoff at the idea of an HSA or additional planning.
  • You’re in a unique position to help clients live to their full potential, extending the life of your professional relationship.