The Road to Retirement: Get Clients There Efficiently and Smoothly with This Strategy

Christine Simone
February 7, 2024

Before the days of GPS, there were paper maps. These worked fine until you hit construction, road closures, blocked-off exits, and other hindrances that static maps couldn’t account for. Sometimes even taking a detour became difficult if you hadn’t planned it before the trip. With GPS, you get real-time updates about exit closures and roadblocks, and you can even plug in detours without losing your way. 

Planning for retirement can be similar. If you created a “map” for a client’s retirement goal when they were healthy and in their 30s, and haven’t updated it since, you and your client are going to hit several roadblocks. Roadblocks like: 

  • Realizing a year before they turn 65 that they don’t have enough saved now that healthcare costs have increased. 
  • Having fewer funds because they’ve been taking care of an aging parent for the past ten years and will likely continue to do so for the next ten. 
  • Getting diagnosed with a chronic condition that increases their healthcare costs and limits their ability to work.

Or, maybe your client’s retirement goals have changed, and the original map doesn’t get them to their destination anymore. In all these situations, a financial plan that updates at least annually would solve these problems. More specifically, including healthcare planning in the financial planning process will help navigate roadblocks and offer a more accurate route that updates in real time.

What is healthcare planning?

At Caribou, we define healthcare planning as a comprehensive overview and optimization of clients' present and future healthcare costs based on personalized needs and budgets. Healthcare planning is the practice of finding cost savings opportunities at multiple points in a person’s life as they relate to healthcare. For example, conducting a HealthPlanning Analysis a year before a client’s retirement date to determine what the optimal health coverage option will be for them in the first year of their retirement. Sometimes healthcare planning is just a conversation about long-term care and the cost of aging. There is no one-size-fits-all, cookie-cutter approach to healthcare planning. It’s individualized and personalized, and (at the bare minimum) based on clients' health needs and budgets.

How does healthcare planning help retirement plans stay on track?

Like any financial goal, unforeseen costs can quickly derail the plan created to achieve that goal. Expensive medical bills, poor health plan coverage choices, and over or underestimating how much healthcare costs will cost over one’s lifetime in retirement all create significant financial risks for clients. For retirement, specifically, healthcare costs pose a major threat if you don’t include them in the financial plan. After all, healthcare is the third-highest area of spending in retirement and the number one reason behind bankruptcies. It’s also worth noting that Americans are living longer, and 70% of people 65 and older will need some form of long-term care in their lifetime. When you put all those facts together, it becomes clear that planning for healthcare costs is a necessary part of a successful financial and retirement plan.

Aside from costs, clients of financial advisors expect their advisors to help them plan for healthcare costs in retirement. Eight in ten retirees list out-of-control healthcare costs as a top concern, and 40% of respondents reported they're looking for insurance advice as a product/service beyond core investment management. For Baby Boomers, specifically, 54% of those surveyed said they feel confused by retirement healthcare costs and insurance information. Clients want to feel secure about their retirement goals and the healthcare decisions they make that impact their life in retirement. Clients are looking to you, the financial advisor, to make sure their financial plan creates a smooth, efficient road to retirement. That means including healthcare costs in their financial plan not only to create a more accurate plan but to also dispel the confusion and worry they have about healthcare costs and coverage.

How can I talk about healthcare planning with my clients who are retiring soon?

Clients’ 64th birthdays are a great trigger to bring up retirement and healthcare planning. Send clients a birthday card along with a note prompting them to schedule a meeting with you to discuss retirement plans. During the meeting, as you go through the important aspects of retirement, touch on their health insurance options and costs. Medicare is, of course, the most common health insurance for people 65 and older. Discuss what Medicare is, how it works, and their different plan options

Ask clients about their current and future expected healthcare needs in retirement. What medications do they currently take? Do they think they’ll need joint replacement surgery in the future? If they need senior care in the future (which they likely will, since 70% of clients will require some form of long-term care in their life), what are their preferences for at-home or community-based settings? 

If your client is retiring before 65, their health insurance options are much different than clients who retire post-65. You can read all about pre-65 retiree health insurance options in this free guide.

Final Thoughts

Retirement is a major milestone that most people hope to achieve in their lifetime. Don’t let unaccounted-for healthcare costs be the reason the retirement plan that you and your client have worked so hard on becomes as helpful as an outdated paper map. Conducting a personalized analysis to get a client’s estimated annual healthcare costs can make a world of difference and doesn’t require either of you to become experts in health insurance or the world of healthcare costs. Including what a client can expect to spend each year in fixed healthcare costs in their financial plan will ensure their road to retirement is efficient and smooth, and will make you a standout financial advisor.

Download "More Than Medicare: How Healthcare Planning Helps Clients Across All Generations"

Download "Supporting Clients Through Open Enrollment: A Collection of Case Studies"

Download "Caribou Customer Success Stories: Jackson Square Capital"

Download the Q2 2023 Caribou Healthcare Planning Report

Medicare Eligible & Still Working: A Case Study on How To Save Clients Thousands When They Are Working Past 65

The Key to Growth for Financial Firms: Healthcare Planning

Download the Q1 2023 Caribou Healthcare Planning Report

The Financial Advisor's Guide to Healthcare and Taxes

White Paper
Financial Planning's Missing Pillar: Healthcare Planning

2022 Marketplace Open Enrollment Report

2022 Medicare Open Enrollment Report

Download the Q3 2022 | Caribou Healthcare Planning Report

Using The Most Common Life Events To Bring Healthcare Planning Into Financial Plans: A Caribou Case Study

Healthcare Planning Data Insights: Medicare Open Enrollment

Download the Q4 2022 Caribou Healthcare Planning Report

Download 2023 | The Financial Advisor's Guide to Open Enrollment

Healthcare Planning Data Insights: Marketplace Open Enrollment

Download the Q2 2022 | Caribou Healthcare Planning Report

Download The Secret to Better Client Retention for Financial Advisors: Healthcare Planning

Download Healthcare Planning & Early Retirement: A Guide for Financial Advisors

Download "From $40K in Annual Drug Costs to $4K: A Caribou Case Study"

Download Healthcare Planning 101: A Starter Guide for Financial Advisors

Download the Caribou Case Study “Over 75% Savings in Health Plan Premiums & an Avoided Crisis”