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Gen Xers feel the impact of COVID-19 and rising health care costs

SEP. 29, 2020

In surprising survey data from the 2020 Health Care Consumer Survey conducted by the Nationwide Retirement Institute®, younger generations – specifically Millennials and Gen Xers – are the most concerned about (and impacted by) current and future health care expenses. In fact, 74% of Millennials and 81% of Gen Xers say one of their top fears in retirement is their health care costs getting out of control – both of which topple concerns across Boomers+.1

To more deeply understand the concerns, behaviors and health care planning needs of both Millennials and Gen Xers, Nationwide Financial recently launched a special “Health Care Planning Across Generations” blog series to explore distinct insights for financial professionals to consider about these influential generations. In our first blog, we explored how Millennials prioritize their health and wealth, what stress they’re currently under due to competing health and wealth priorities and what type of support this group is looking for from financial professionals.

In our second installment of this special blog series, we’re focusing now on Gen Xers or individuals age 40-55. Often referred to as the “sandwich” or “forgotten” generation, Gen Xers are significantly smaller than Boomers+ and are often less of a focus than their Millennial counterparts, especially in media. Many of them also find themselves at a unique intersection: they’re either caring for their adult children, their aging parents or both. According to recent survey data1, Gen Xers also happen to be the most concerned generation when it comes to planning for health care costs in retirement. Here’s three distinct insights about Gen Xers from our latest health care survey1 for financial professionals to consider:

1. They are the most worried about retirement and health care costs

Majorities across all generations, but particularly Gen Xers, are concerned about the cost of health care (78%), not having the money to cover unplanned medical expenses (77%), and/or the impact of inflation on their retirement income (75%). While a majority across all generations say one of their top fears in retirement is their health care costs rising out of control, Gen Xers are more likely than Millennials to agree.

Moving into my mid-40s made me realize the connection between health and wealth and how I need to prioritize my health and utilize saving options to plan for health care costs in retirement. For instance, truly evaluating if I need to use my Health Savings Account (HSA) dollars today or save them as an investment for future health care costs in retirement.

2. They are significantly feeling the impacts of COVID-19

Concerns about health and wellness and health care costs are being further heightened by COVID-19, which has many Gen Xers now re-evaluating their health care plans. Being more fearful of what a global health care crisis may do to their retirement plans than Millennials and Boomers+, 69% of Gen Xers worry more now about their financial stability with 67% worrying more about their health.

3. They are looking for support from financial professionals

Today’s uncertain times especially present financial professionals an opportunity to offer guidance to Gen Xers concerned about managing health care costs and financial stress. 70% of Gen Xers who have a financial professional say they’re relying on them more than ever due to COVID-19, while nearly a quarter who don’t have a financial professional say they plan to engage one for the first time due to COVID-19.

Like many Gen Xers, the global pandemic has changed how I view my short-and long-term investment goals and risk tolerance and whether I need the help of a financial professional in order to meet them. In addition, talking about your plan with someone and taking advantage of the online planning tools offered by Nationwide can not only help you reach your personal goals, but can also help ease anxiety and reduce stress during this uncertain time.

Help make conversations easier with clients

As evident by the 2020 Health Care Consumer Survey, a staggering number of future retirees are concerned about health care retirement costs. Due to the COVID-19 pandemic, more people are looking to engage financial professionals, many for the first time, about this pressing topic. Planning for health care costs by utilizing online tools like Nationwide’s Health Care Cost Assessment is one way you can help your clients make informed decisions by helping ensure they are prepared with a holistic plan.

Disclaimer:

This information is general in nature and is not intended to be tax, legal, accounting or other professional advice. The information provided is based on current laws, which are subject to change at any time, and has not been endorsed by any government agency.

Neither Nationwide nor its representatives give legal or tax advice. Please have your clients consult with their attorney or tax advisor for answers to their specific tax questions.

Sources

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    Nationwide Retirement Institute®’s ninth annual Health Care Consumer survey conducted May 7 – May 26, 2020 among 1,940 U.S. adults age 24 or older.

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