Healthcare cost blind spot threatens clients’ retirement security

Most families aren't discussing age-related healthcare costs - and the gap between what adult children assume and what their parents have actually planned for is wide enough to derail retirement strategies.

New research from Lincoln Financial finds that 80% of families have not had an in-depth conversation about age-related healthcare costs, while 78% have skipped discussions about retirement income and 77% have never addressed legacy planning.

The findings, drawn from Lincoln's Consumer Sentiment Tracker, underscore what many advisors already suspect: assumptions are standing in for plans, and clients are not flagging the problem themselves.

Adult children consistently overestimate how prepared their parents are. Some 55% of adult children believe a healthcare cost plan is in place, while only 38% of parents say one actually exists. That 17-point gap represents a planning blind spot that advisors are uniquely positioned to close.

The scale of the problem

According to Lincoln's research, 82% of respondents report feeling concerned about paying for long-term care services for themselves or a family member, and nearly half (42%) say they are highly concerned.

But that anxiety rarely translates into a client-advisor conversation. Among respondents who work with a financial professional, only 21% say they have discussed long-term care planning, just 14% have talked about long-term care insurance, and only 7% have discussed elder care planning.

Fidelity Investments' latest Retiree Health Care Cost Estimate puts the average lifetime bill for a 65-year-old retiring in 2026 at $185,500 - a 7.5% increase from the prior year - and that figure excludes long-term care costs. For advisors managing retirement income strategies, that is a material variable being left out of the equation.

Among clients age 55 and above, only 10% have had in-depth conversations about preparing for medical expenses in retirement, and nearly half have never discussed the issue at all.

A direct opportunity for advisors

The data makes the advisor's role explicit. Jared Nepa, senior vice president and head of insurance solutions distribution at Lincoln Financial, said the findings highlight a growing need for advisors to take the lead.

"Clients are looking for guidance, and early planning can make all the difference in helping them protect their financial future and maintain control over their care decisions," he said.

Clients with advisors are measurably better prepared. Data from New York Life shows that 87% of adults working with a financial professional feel confident they will save enough for retirement, compared to 49% without one. But that confidence advantage can evaporate quickly when long-term care costs emerge unplanned.

As InvestmentNews has reported, advisors who push HSAs to fill Medicare gaps are already reframing healthcare costs as a core planning issue rather than a footnote. Lincoln's research suggests the same reframing is urgently needed around family conversations, not just portfolio allocations.

Breaking the silence

The structural challenge is behavioral as much as financial. "Families often assume these decisions have already been made," said Darrel Tedrow, executive vice president and president of life insurance and retail shared services at Lincoln Financial. When generations don't talk about "long-term intentions or financial priorities," those assumptions can leave families feeling unprepared when consequential decisions arrive.

Lincoln's research points to a cascade effect: healthcare costs affect legacy planning; retirement income shapes how much support aging parents may need; unaddressed coverage gaps alter what surviving family members face. No single decision sits in isolation, which is precisely why advisors who surface these conversations early add the most value.

For advisors looking for a practical entry point, InvestmentNews coverage on how healthcare needs shape retirement and estate planning offers a framework for structuring those conversations. The window to act is narrow: once a care event occurs, families are forced into decisions under pressure rather than from a position of planning. Lincoln's data suggests most of them arrive there without the groundwork laid.

Advisors who initiate the conversation, not wait for clients to raise it, are the ones who close the gap. As InvestmentNews has covered extensively in its long-term care planning series, that proactive posture is increasingly what distinguishes advisors who retain multi-generational client relationships from those who don't.