T. Rowe Price Group, Inc. · NASDAQ:TROW
T. Rowe Price — Investor Presentation (March 2016)
23 slides from T. Rowe Price's investor presentation, March 2016
Slide 1: Guide Your Clients to Plan for Retirement Health Care Costs
GUIDE YOUR CLIENTS TO PLAN FOR RETIREMENT HEALTH CARE COSTS
Slide 2: Top 5 Fears About Retirement
Top 5 Fears About Retirement KNOW YOUR CLIENTS’ NEEDS EDUCATE YOUR CLIENTS PREPARE YOUR CLIENTS GUIDE YOUR CLIENTS 1 2 3 4 5 43% 32% 26% 26% 17% Running Health care Not being able Health Not being able out of costs to maintain issues to meet my money my standard of monthly living expenses Source: 20
Slide 3: How the Health Care Dollar Is Spent
How the Health Care Dollar Is Spent KNOW YOUR CLIENTS’ NEEDS EDUCATE YOUR CLIENTS PREPARE YOUR CLIENTS GUIDE YOUR CLIENTS 20% 32% Doctor Visits Hospital Care & Services 4% 29% Dental Other Services 5% 10% Nursing Home Prescription Drugs Source: Centers for Medicare and Medicaid Services, National He
Slide 4: Medicare Does Not Cover All Retirement Health Care Costs
Medicare Does Not Cover All Retirement Health Care Costs KNOW YOUR CLIENTS’ NEEDS EDUCATE YOUR CLIENTS PREPARE YOUR CLIENTS GUIDE YOUR CLIENTS WHAT MEDICARE COVERS WHAT MEDICARE DOES NOT COVER Inpatient hospital costs Hearing aids Surgeries Most vision care Doctor visits Most dental care Personal ai
Slide 5: Health Care Costs in Retirement Fall Into Two Categories
Health Care Costs in Retirement Fall Into Two Categories KNOW YOUR CLIENTS’ NEEDS EDUCATE YOUR CLIENTS PREPARE YOUR CLIENTS GUIDE YOUR CLIENTS THE 1 Predictable THE 2 Unpredictable 5
Slide 6: The Predictable Costs
The Predictable Costs KNOW YOUR CLIENTS’ NEEDS EDUCATE YOUR CLIENTS PREPARE YOUR CLIENTS GUIDE YOUR CLIENTS To cover Medicare, Americans over age 65 will have monthly premiums between $122/month and $463/month, depending on their income and choice of coverage. Source: medicare.gov. 2016 rates for Pa
Slide 7: The Predictable Costs
The Predictable Costs KNOW YOUR CLIENTS’ NEEDS EDUCATE YOUR CLIENTS PREPARE YOUR CLIENTS GUIDE YOUR CLIENTS MEDICARE PART B INCOME-ADJUSTED MONTHLY COSTS Individual Income Couple Income Monthly Cost $85k or less $170k or less $121.80 Above $85k to $107k Above $170k to $214k $170.50 Above $107k to $1
Slide 8: The Predictable: Medicare and Medigap
The Predictable: Medicare and Medigap KNOW YOUR CLIENTS’ NEEDS EDUCATE YOUR CLIENTS PREPARE YOUR CLIENTS GUIDE YOUR CLIENTS POTENTIAL TOTAL INDIVIDUAL HEALTH CARE COSTS IN 2015 $ 4,296 not including nursing home, out-of-pocket prescription drugs, copays, assisted living, or most home care costs. Sou
Slide 9: The Predictable: Medicare and Medigap
The Predictable: Medicare and Medigap KNOW YOUR CLIENTS’ NEEDS EDUCATE YOUR CLIENTS PREPARE YOUR CLIENTS GUIDE YOUR CLIENTS MONTHLY BUDGET FOR RETIREMENT HEALTH CARE IN 2015 $ 176 + 182 = 358 $ $ Medicare costs Non-medicare Combined total for those in the incurred costs highest income Mediga
Slide 10: The Unpredictable Costs: Three Scenarios
The Unpredictable Costs: Three Scenarios KNOW YOUR CLIENTS’ NEEDS EDUCATE YOUR CLIENTS PREPARE YOUR CLIENTS GUIDE YOUR CLIENTS RETIREMENT HEALTH CARE SCENARIOS IN 2015 The Smiths The Johnsons The Grahams Age Now 65 65 65 Assets $600,000 $1.2 million $1 million Savings Growth 6.5% a year 6.5% a year
Slide 11: The Smiths: Healthy, but Haven't Planned
The Smiths: Healthy, but Haven’t Planned KNOW YOUR CLIENTS’ NEEDS EDUCATE YOUR CLIENTS PREPARE YOUR CLIENTS GUIDE YOUR CLIENTS Retired at 65; Not including health care costs 600,000 in 30% Including health care costs 49% assets Chance of Being Alive Without Money 25% Chance of running 20% out of mon
Slide 12: The Johnsons: Prepared for Potential Health Problems
The Johnsons: Prepared for Potential Health Problems KNOW YOUR CLIENTS’ NEEDS EDUCATE YOUR CLIENTS PREPARE YOUR CLIENTS GUIDE YOUR CLIENTS Retired at 65; Not including health care costs $1.2 million 30% Including health care costs in assets Chance of Being Alive Without Money 25% 16% Chance of runni
Slide 13: The Grahams: Average Health, Average Savings
The Grahams: Average Health, Average Savings KNOW YOUR CLIENTS’ NEEDS EDUCATE YOUR CLIENTS PREPARE YOUR CLIENTS GUIDE YOUR CLIENTS Retired at 65; Not including health care costs $1 million in Including health care costs 30% investable assets Chance of Being Alive Without Money 25% 20% Chance of runn
Slide 14: Retiree Who Earned $75,000 on Average While Working
Retiree Who Earned $75,000 on Average While Working KNOW YOUR CLIENTS’ NEEDS EDUCATE YOUR CLIENTS PREPARE YOUR CLIENTS GUIDE YOUR CLIENTS 60 YEAR OLD RETIRING AT 66 Social Security Benefit Premiums Actual Received Income $60,000.00 $50,000.00 $40,000.00 $30,000.00 $20,000.00 $10,000.00 $0.00 66 68 7
Slide 15: At Current Medicare Maximum Income
At Current Medicare Maximum Income* KNOW YOUR CLIENTS’ NEEDS EDUCATE YOUR CLIENTS PREPARE YOUR CLIENTS GUIDE YOUR CLIENTS 60 YEAR OLD RETIRING AT 66 $80,000.00 Social Security Benefit Premiums Actual Received Income $70,000.00 $60,000.00 $50,000.00 $40,000.00 $30,000.00 $20,000.00 $10,000.00 $0.00 6
Slide 16: Help Clients Plan to Fund Health Care: Consider an Annuity Solution
Help Clients Plan to Fund Health Care: Consider an Annuity Solution KNOW YOUR CLIENTS’ NEEDS EDUCATE YOUR CLIENTS PREPARE YOUR CLIENTS GUIDE YOUR CLIENTS PLANNING CONSIDER AN ANNUITY Plan for predictable SOLUTION TO PLAN FOR: health care costs Future Medicare premiums $150,000 $10,079.37 Initial Ann
Slide 17: Appendix
APPENDIX
Slide 18: Disclosures
Disclosures PWC Employee Financial Wellness Survey PWC's Employee Financial Wellness Survey tracks the financial and retirement wellbeing of working U.S. adults nationwide. This year it incorporates the views of over 1,700 full-time employed adults representative of the U.S. population by age and ge
Slide 19: Disclosures—Continued
Disclosures—Continued Assumptions and Methodology: To compute (1) the probability distributions of health care costs, which are used in the computation of expected health care costs, (2) the various probabilities of living to various ages (including the life expectancy) and (3) the probabilities of
Slide 20: Disclosures—Continued
Disclosures—Continued The same 10,000 iterations are used for the probability distributions for the prescription drug and “regular” health costs, but these are based on the chronic conditions of the retiree(s), the starting prescription drug cost, the premiums and benefits to and from the applicable
Slide 21: Sources
Sources Source Materials for Methods of Determining Probability Distributions of HealthCare Costs and Successful Scenarios For Long Term Care Hill, C. What Causes Alzheimer’s Disease? About.com. Johnson, E., Brookmeyer, R., and Zeigler-Graham, K. Modeling the Effect of Alzheimer's Disease on Mortali
Slide 22: Sources—Continued
Sources—Continued For Prescription Drugs and "Regular" Health Costs Author's survey of relative and absolute prescription drug costs; www.agingstats.gov, indicators 16,29, 30,31. Medicare and You, 2012 Edition, Centers for Medicare and Medicaid Services. 2009 Sourcebook—American Association for Long
Slide 23: Thank You
THANK YOU T. Rowe Price Investment Services, Inc., Distributor C1WM2Z3RT 2016-US-19833 3/16
T. Rowe Price Group — Investor Presentation (March 2016) on 6ix