NZers Unprepared And Unrealistic About Retirement Healthcare
18th December 2012
New Zealanders Unprepared And Unrealistic About Retirement Healthcare Costs
• 79% of New Zealanders think they will have to pay for some of their elective healthcare in retirement.
• Yet just one in five have started saving.
• Many think that savings of less than $10,000 will be sufficient.
A new survey of over 2000 New Zealanders by Southern Cross Healthcare Group has found that only a quarter believe they have any understanding of how much they need to save for their healthcare costs in retirement – and of those people, many are vastly underestimating what they may actually need to cover potential costs.
The median amount people expected to need in current value over their retirement was $20,000. However, 35% believed they would need $10,000 or less.
Southern Cross Healthcare Group CEO Ian McPherson said the results showed a significant amount of education and support was needed if New Zealand’s future retirees were to be able to access the healthcare they wanted.
“As the population ages, it is highly unlikely the Government is going to be able to continue providing the level of non-urgent healthcare services it does today. The reality is $10,000 won’t get you very far over a 15 year retirement – especially as medical inflation has historically risen much faster than CPI. Today a single hip replacement can cost upwards of $18,000 and even a smaller, and very common, procedure such as a single cataract removal generally costs in excess of $3500.”
The survey found that younger people were the most confident, yet were the least realistic about future healthcare costs in retirement. 36% of those aged under 30 thought they could pinpoint how much they would need. Yet of those, 41% believed $10,000 or less would be sufficient.
Of those aged 50 plus, only 16% thought they knew how much they would need to save. Of those, 33% believed it would be $10,000 or less.
Additional findings from
the survey included:
• 11% don’t expect the Government to be funding any healthcare at all in retirement – rising to 15% of those aged under 30.
• 21% expect the Government to fund all of their healthcare services in retirement.
• 47% expect to use personal savings and 35% expect to use their health insurance to cover some of their healthcare costs in retirement.
• Of publicly-provided services, 82% expected emergency surgery to be provided but less than half expected elective surgery to be provided in their retirement.
• Only 27% of those aged 50 plus have started saving for healthcare costs in retirement.
McPherson said provision for healthcare needed to become an integral part of New Zealanders’ retirement savings plans.
“A previous generation
believed the state would provide for their old age. Today,
it’s very clear that this will not be the case, and we are
being incentivised and encouraged to save for our
retirement. The same clearly needs to be done for our future
healthcare costs. What we also need to focus on is ensuring
New Zealanders get the best possible value for their health
New Zealanders’ attitudes towards retirement healthcare costs
|All people surveyed||Under 30||30 to 39||40 to 49||50 plus|
|Planning to rely solely on free Government-funded healthcare in retirement||21%||8%||16%||22%||32%|
|Expect to cover some of their healthcare costs in retirement||79%||92%||84%||78%||68%|
|Have started saving for their healthcare costs in retirement||20%||13%||19%||19%||27%|
|Believe they have an idea of how much to save for retirement healthcare costs||25%||36%||32%||21%||16%|
|The amount of retirement healthcare savings people think they will require:|
|$50,001 - $100,000||16%||17%||14%||15%||15%|
|$20,001 - $50,000||25%||23%||27%||25%||21%|
|$10,001 - $20,000||19%||11%||19%||16%||28%|
|$10,000 and under||35%||41%||23%||28%||33%|
|Methods of covering cost of healthcare when retired:|
|Free Government-funded services||69%||61%||64%||70%||77%|
|Expect the Government to cover the cost of the following health care services in retirement:|
|Minor elective surgery||41%||30%||37%||40%||51%|
|Major elective surgery||48%||39%||43%||50%||55%|
|None of the above||11%||15%||15%||9%||7%|