1/3 of Workers Say Obamacare Will Delay Their Retirement

Obamacare is officially under way, but one-third of American workers still feel that the program will lead to higher health care costs that will delay their retirements, according to a new poll from MoneyRates.com.

The Op4G-conducted survey asked 2,000 respondents in the U.S. how they expect Obamacare will impact their exit from the workforce. Thirty three percent said that Obamacare will force them to delay retirement, compared with just 17 percent who said it will allow them to retire earlier. The remainder were split about evenly between those who do not think the program will affect when they retire, and those who do not know.

Measuring the fear around Obamacare
With the program still in its early stages, the actual impact of Obamacare -- also known as the Affordable Care Act -- remains to be seen. What can be said at this point is that the debate over the program has created a certain amount of fear, and this survey measures the degree of that fear.

Thirty three percent of respondents said that because of higher health care costs, Obamacare would force them to delay retirement -- and some felt it would do so by a significant time interval. Thirty nine percent of those who feel they will have to retire later believe the delay will be by five years or more, and another 30 percent believe the delay will be between three and five years.

While 33 percent expect Obamacare to delay their retirement, just 17 percent believe that it will lower health care costs enough for them to retire earlier than they previously planned. Also, those who expect to be able to retire earlier see a milder magnitude of impact than those who expect they will have to work longer. Seventy one percent of those who expect Obamacare will allow them to retire earlier expect it will move up their retirement date by three years or less. Just 8 percent believe it will accelerate their retirement by five years or more.

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A Congressional Budget Office report estimated that Obamacare would reduce U.S. full-time employment by 2.5 million by 2024 because it would allow people to opt out of working. Apparently, a significant portion of American workers feel it will do just the opposite by creating financial pressures that will force them to work longer.

Four tips for managing health care costs in retirement
When people think about how much money they will need to retire, they often assume that their major expenses are behind them. The mortgage may be paid for, there are no more kids to support and no more college savings to build up.

However, health care costs, including insurance, may increase as you get older. Medicare eligibility may help, but it won't cover everything, especially if you plan to retire early. Here are four ways you need to account for health care costs in your retirement planning:

  1. Factor health insurance into your when-to-retire projection. In planning for retirement, people who have succeeded in building up a strong nest egg often dream of putting that money to early use by retiring before age 65. If that's your goal, keep in mind that means you may lose access to employer-sponsored health care before you are eligible for Medicare. Thanks to Obamacare, you will be able to purchase insurance independently, but it may be more expensive than through your employer, and you will no longer benefit from employer contributions to the cost.
  2. Include health insurance in your retirement budget plans. Do some research on the price of health insurance plus likely out-of-pocket costs so you can include these in your planned retirement expenses -- and be sure to make a healthy allowance for rising prices.
  3. Use the power of the marketplace. As the public and the insurance industry adapt to Obamacare, the market is likely to be pretty dynamic. So, if you are buying health insurance independently, shop around yearly, because the competitive landscape may change frequently.
  4. Consider partial self-insuring. Accepting higher co-pays can mean lower premiums, and people can self-insure against those costs by putting money from lower premiums into health savings accounts they can dip into for these out-of-pocket costs. This is especially practical for people who make infrequent doctor visits and have few or no prescriptions.

While the poll shows that many Americans have formed an initial impression of how Obamacare will affect their retirement readiness, the true impact won't be known until the first wave of Americans crosses the boundary from the workplace to retirement under Obamacare. But regardless of that outcome, the above steps can help you manage that process more smoothly.

This article One-third of Workers Say Obamacare Will Delay Their Retirement originally appeared on MoneyRates.com.

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