How advisors help clients manage health-care costs in retirement

Certified financial planner Ken Waltzer has an older female client who suffers from congestive heart failure. Given the high cost of her prescriptions, Waltzer recently became concerned by how much money she and her husband were spending.

“I suggested that maybe I should talk to her doctor about her medications,” said Waltzer, co-founder and managing partner of KCS Wealth Advisory in Los Angeles. “They were the most expensive in their class, and there were less expensive options.”

Offering to help get those costs down is not unusual for Waltzer, who once was a practicing physician and also worked at a large insurance company.

Yet with retirees trying to stretch their savings across their lifetime — and often fearing that they won’t be able to — other advisors also are digging deeper instead of giving that line item just a once-over.

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“A good financial advisor handles not just the investments of a client, but all aspects of their financial life — and health-care costs are a large and growing piece of that,” said Dale Brown, senior executive vice president of Winston-Salem, North Carolina-based Salem Investment Counselors, ranked No. 1 in the CNBC FA 100 list of top-ranked financial advisory firms for 2019.

The average 65-year-old male-female couple retiring in 2019 will spend an estimated $285,000 on that category over the rest of their lives, according to Fidelity Investments. That figure excludes expenses related to long-term care — help with daily activities such as bathing and dressing — which advisors typically calculate separately.

Yet, like many other expenses in retirement, health-care spending occurs over many years, if not decades, which means it generally should be factored into a client’s cash flow. And while not everyone will even reach the average amount, others will shell out even more.

“Part of the conversation should be exploring how your client uses the health-care system,” said CFP Stacy Francis, president and CEO of Francis Financial in New York. “It can be drastically different from one person to another, which means their expenses can be drastically different.”

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