Pre-retirees do not fully anticipate the challenges of retirement suggests a new poll, and that disconnect has particular implications for the long-term care industry.
Twenty-five percent of retirees polled by independent researchers on behalf of the Harvard School of Public Health said that life in retirement is worse than before retirement while only 14 percent of pre-retirees believe that life overall will be worse when they retire.
"Pre-retirees don't fully anticipate the challenges of retirement because they sort of estimate that things will be worse in a bunch of categories to a much smaller degree retirees say it is worse," said Gillian K. Steelfisher, PhD, research scientist and assistant Director of the Harvard Opinion Research Program at the Harvard School of Public Health.
[See also: Americans are clueless about retirement healthcare costs.]
The Retirement and Health Poll, a collaboration between Harvard, National Public Radio and the Robert Wood Johnson Foundation, focuses on views and experiences related to retirement. A national sample of 1,254 people age 50 and older was used.
Of particular note are the views pre-retirees – and retirees – have on Medicaid. Neither group said they believed Medicaid would be very important to them in retirement. Sixty-five percent of pre-retirees and 74 percent of retirees said Medicare will be personally important to them in retirement but only 38 percent of each group said Medicaid will be personally important to them in retirement.
Although Medicaid is the primary payer across the country, said Steelfisher, only 10 percent of pre-retirees believe that Medicaid will be their primary payer for long-term nursing home care.
For those engaged in the fight against budget cuts to Medicare and Medicaid, this disconnect among pre-retirees and retirees should be a red flag, said Steelfisher, especially since older people, historically, make up a large portion of those who vote in elections.
"From a policy perspective they may not be fully engaged in the issue. They may not realize they have a stake in this," said Steelfisher. "I think the risk is that they would not be as worried about cuts to the program. They might not fully anticipate how this is going to affect them. They may see it as applying to other people but not them."
That retirees and pre-retirees don't seem to understand how Medicare and Medicaid work has implications for their own financial planning but also for the long-term care industry beyond policy concerns.
"When people are actually examining the process or thinking about enrolling, they're looking at long-term care or long-term care insurance, they may not really realize what the alternatives are so they may not really understand either the benefits of long-term care insurance; they may not understand how to get themselves set up financially to protect themselves most if they do need or their spouse needs long-term care. I think these are important things for the long-term care community to think about."
Other findings from the poll include:
• Both pre-retirees and retirees expect a long, relatively healthy life.
• Pre-retirees and retirees differ in their views on the future of Medicare, but neither group wants a complete overhaul or major change to the program.
• A substantial minority of pre-retirees say they are likely to have trouble paying for healthcare in retirement, and a substantial minority of retirees say they have actually experienced many of these problems.
• Admission to a nursing home would worry most retirees and pre-retirees.
• For most retirees, life in retirement is better or the same as it was before, but it is worse for a substantial minority in key areas, including health and finances.
• A substantial minority of pre-retirees and retirees say they don't or won't have enough money to live comfortably.
Follow HFN associate editor Stephanie Bouchard on Twitter @SBouchardHFN.