| FOR IMMEDIATE RELEASE September 1, 2010 |
Contact: Mark Leach Media Relations 817-569-2419 msleach@firstcommand.com www.firstcommand.com |
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Americans saving more for health care in retirement, First Command reports
First Command Financial Behaviors Index® reveals 42 percent jump in monthly savings
FORT WORTH, Texas – Concerned about rising medical expenses, middle-class Americans are bumping up their monthly retirement savings to cover future health care costs.
The First Command Financial Behaviors Index® reveals that average monthly savings solely for health care costs during retirement climbed to $245 in July, up 42 percent from $173 a year ago. One in five Americans who save for health care costs in retirement are now putting over $300 per month toward this future expense, compared to 14 percent in 2009.
“This significant increase in savings is being driven by deep worries among consumers,” said Scott Spiker, CEO of First Command Financial Services, Inc. “More than two thirds of middle-class families are concerned about how they will pay for medical care during retirement, and they are starting to take action. Three out of ten consumers say that their current retirement planning includes saving for health care costs in retirement, separate from typical daily living expenses.”
Americans predict they will need more than $100,000 above traditional retirement savings to cover health care costs during retirement. While substantial, this estimate is a fraction of the out-of-pocket expenses Americans will likely face in retirement. In a May 2008 study, the Employee Benefit Research Institute determined that a couple who retired in 2008 at age 65 would need $635,000 in savings to cover Medigap premiums, Medicare Part B and Part D premiums and out-of-pocket drug expenses. And a couple retiring in 2018 at age 65 will need more than $1 million.
“While the savings picture is improving, relatively few Americans are adequately planning for the medical expenses they will face in the years ahead,” Spiker said. “Social Security and Medicare will become increasingly stressed by a growing elderly population that will face higher health care costs and longer retirements than past generations. Tomorrow’s retired Americans will have to bear more of the financial burden of their own medical care.”
About the First Command Financial Behaviors Index®
Compiled by Sentient Decision Science, LLC, the First Command Financial Behaviors Index® assesses trends among the American public’s financial behaviors, attitudes and intentions through a monthly survey of approximately 1,000 U.S. consumers aged 25 to 70 with annual household incomes of at least $50,000. Results are reported quarterly. The margin of error is +/- 3.1 percent with a 95 percent level of confidence. www.firstcommand.com/research
About Sentient Decision Science, LLC
Sentient Decision Science was commissioned by First Command to compile the Financial Behaviors Index®. Sentient is a full-service market research firm with special vertical expertise within the financial services industry. Sentient specializes in advanced research design and statistical analysis of behavioral and attitudinal data.
About First Command
First Command Financial Services and its subsidiaries, including First Command Bank and First Command Financial Planning, assist American families in their efforts to build wealth, reduce debt and pursue their lifetime financial goals and dreams—focusing on consumer behavior as the first and most powerful determinant of results. Through personalized financial plans that emphasize accumulating wealth while reducing risk, First Command Financial Advisors have established lasting relationships with hundreds of thousands of client families since 1958.
First Command Financial Services, Inc. is the parent company of First Command Financial Planning, Inc. (Member SIPC, FINRA) and First Command Bank (Member FDIC). Financial planning services and investment products, including securities products are offered by First Command Financial Planning, Inc. Insurance products and services are offered by First Command Financial Services, Inc. Banking products and services are offered by First Command Bank. Securities products are not FDIC insured, have no bank guarantee and may lose value. In certain states, First Command Financial Services, Inc. is a separately registered domestic corporation and does business in California as “First Command Insurance Services.” A financial plan, by itself, cannot assure that retirement or other financial goals will be met.
