Convergence of Retirement and Healthcare takes center stage
At a packed boardroom at the University of Denver’s Daniel College of Business, TPSU Adjunct Lecturer Daniel Bryant, Managing Director at Sheridan Road, led a lively discussion with almost 30 people about the challenges people face today to manage their benefits budget. With healthcare costs expected to rise, planning for retirement becomes more challenging and as employers move more benefit costs to workers, there are fewer dollars available for saving.
Rich Ward, SVP at TIAA-CREF, discussed the trend of employers shifting healthcare costs to employees with some even pulling back on promised benefits as life expectancy continues to rise. Ward noted that there is a shift towards employee directed and funded healthcare plans just as employers shifted the burdens of saving for retirement – a clear DC-ization of healthcare. EBRI estimates that current a couple retiring today needs to have $392,000 saved if they have more than normal prescription needs; by 2025, healthcare is expected to consume 90% of social benefits for people retiring.
Solutions? Ward noted that more employers are moving to high-deductible healthcare plans coupled with HSAs, the only triple tax free savings vehicle which Ward predicts will be heavily used in retirement. For employees, Daniel Bryant had a simple solution. Save more tomorrow – and now if possible.
