Evercore Retirees Face Rising Health Care Costs: Insights from Patrick Ray & Tyson Mavar

'With health care inflation outpacing general costs, Evercore employees should consider building personalized strategies that include HSAs and emergency reserves to help manage future medical expenses.' — Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement.

'As medical expenses continue to rise, Evercore employees benefit from proactively incorporating health care costs into their retirement planning through customized approaches like HSAs and dedicated emergency funds.' — Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article we will discuss:

1. How health care inflation impacts retirement planning for Fortune 500 employees.

2. Strategies with Health Savings Accounts (HSAs) and emergency medical funds.

3. The need for tailored planning to meet Medicare gaps and long-term care needs.

Managing retirement health care costs calls for thoughtful planning, especially as medical expenses continue to outpace general inflation. Yet, for Fortune 500 professionals approaching retirement, generic guidance often misses the mark. Patrick Ray and Tyson Mavar of The Retirement Group, a division of Wealth Enhancement, recommend a customized approach that factors in health care inflation, coverage choices, tax-efficient tools, and access to liquid funds for unexpected medical events.

Health Care Estimate for Retirees

According to the Fidelity Retiree Health Care Cost Estimate, a 65-year‑old retiring in 2025 may need approximately $172,500 saved to cover health and medical expenses during retirement—an increase of over 4% since 2024. ¹  Notably, this estimate assumes enrollment in Medicare Parts A, B, and D and excludes the costs of long‑term care.

Of that estimate, 44% of the costs would go to Medicare Parts B and D premiums, 47% relate to standard out‑of‑pocket costs (such as co-payments and deductibles), and 9% would be needed to purchase prescription medications. ¹

These trends are particularly concerning given that roughly 20% of Americans say they haven’t considered health care in retirement planning, while 17% haven’t taken any planning steps yet. ²

For its part, the Employee Benefit Research Institute (EBRI) notes that a 65‑year‑old couple with higher prescription drug expenses may need as much as $413,000 to have a 90% likelihood of covering their medical needs in retirement. ³

The Value of a Personalized Retirement Health Care Approach

In light of this data, Ray and Mavar recommend developing a retirement health care strategy tailored to each individual's situation, particularly for those at large employers like Fortune 500. Key components could include:

• - Estimating expected medical needs

• - Using Health Savings Accounts (HSAs)

• - Keeping readily available funds for emergencies

• - Aligning health care coverage with lifespan and income expectations

1. Estimating Your Health Care Budget

Although industry research offers a baseline for average health care costs, it does not consider the full range of medical expenses Evercore employees could face post-retirement. For instance, if you factor in costs related to long-term care, estimates could balloon by an additional $26,000 to $127,750 per year. ⁴

Beyond long-term care, additional cost categories could include:

• - Medicare premiums

• - Prescription medications and co‑pays

• - Services not covered by Medicare (e.g., dental, vision)

Ray and Mavar caution Fortune 500 professionals not to underestimate these figures when planning.

2. Gaps in Preparedness

With 17% of Americans having taken no action to plan for health care in retirement, Ray and Mavar emphasize treating health care planning as a central component—not an afterthought.

3. Making Full Use of HSAs

Ray and Mavar suggest consistently contributing to HSAs during working years. For instance, a 35‑year‑old contributing up to $4,300 annually and assuming a 7% return might accumulate over  $500,000  by age 65, including approximately  $140,000 in tax savings . Only about  30%  of HSA holders currently invest those balances.

In their recent webinar, ' Leveraging HSAs to Reduce Health Care Costs ,' Mavar described benefits such as tax‑free growth and withdrawals for qualified medical expenses for those with high‑deductible health plans.

4. Building an Emergency Medical Reserve

Unexpected diagnoses or emergencies can quickly drain resources. Mavar recommends a separate cash reserve—such as in a money market or high‑yield savings account—outside primary retirement accounts. This may help retirees handle health care shocks without impacting long‑term investments.

• Broader Economic Landscape: Health Care Inflation and Trends

Health care spending is projected to continue rising. In a report published by federal actuaries, U.S. health care spending is expected to rise by 7.1% in 2025—well ahead of general inflation. ⁵  Reasons for this rise range from growing personal health care spending and hospital spending growth, to prescription drugs and physician services. As a result, health care expenses could account for 20% of U.S. GDP by 2033. ⁵

At the same time, many health care insurers report higher medical-loss ratios, indicating increased spending on care—including chronic disease management and mental health services—costs that could be passed down to retirees.

Key Recommendations for Retirement Health Care Preparation

• As Mavar and Ray note, the $172,500 estimate for those retiring in 2025 is simply a starting reference point. Early retirement or long-term care needs could push your total higher.

• If you are among the percentage of people who has not yet considered health care costs in your retirement planning, now is the time to start. By leveraging the triple tax advantages available through HSAs, putting aside sufficient reserves to address medical emergencies, and exploring individual strategies that take your personal coverage choices, retirement timing, and health conditions into account, you can build a safety net that considers your long-term health care spending needs.

Final Thoughts

Health care outcomes and personal circumstances vary widely—especially among long‑time Fortune 500 professionals. A tailored planning strategy—covering realistic spending projections, full use of HSAs, dedicated medical reserves, and thoughtful coverage choices—can help support a more predictable and manageable retirement journey.

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Evercore offers its employees both pension plans and 401(k) plans, designed to ensure financial stability during retirement. As of 2023, Evercore's retirement benefits include a defined contribution 401(k) plan, which is managed through ADP and allows employees to contribute a portion of their salary. Employees become eligible for the Evercore 401(k) plan after meeting specific tenure and age requirements, though these are determined by the plan sponsor and can vary based on employment status and tenure. Evercore matches a percentage of employee contributions, though details on the exact match percentage are tied to tenure and specific employment agreements. The Evercore 401(k) plan includes features like automatic payroll deductions, potential Roth 401(k) options, and automatic enrollment, making it a flexible and tax-advantageous option for employees. In terms of a pension plan, Evercore utilizes a cash balance pension formula, where contributions are calculated based on years of service and salary. Employees typically need several years of service to fully vest in the plan.

Restructuring and Layoffs: In early 2024, Evercore announced a restructuring plan that included a reduction of approximately 5% of its workforce across various departments. The firm cited the need to streamline operations and reduce costs in response to changing market conditions and a slowdown in advisory transactions. The decision was part of a broader strategy to enhance operational efficiency.

Evercore offers stock options and Restricted Stock Units (RSUs) as part of its employee compensation package. Stock options at Evercore are typically granted to senior employees and executives, while RSUs are often given to employees at various levels as part of performance-based incentives. The specific terms and conditions for stock options and RSUs, including vesting schedules, can vary based on the employee’s role and performance.

healthcare benefits. Benefits Aggregators: Use benefits-focused sites or forums that might provide comparisons or additional details on Evercore's offerings. Search Results Summary 1. Evercore Official Website Health Benefits Information: Often includes details about health insurance plans, wellness programs, and any updates or changes. Key Terms: Coverage levels, deductibles, co-payments, out-of-pocket maximums, Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs). 2. Company Reports (Annual Reports/SEC Filings) Key Terms: Total compensation packages, benefits overview, healthcare costs, changes in benefit structures. Recent Changes: If there are significant changes or cost adjustments, they will be noted here. 3. Industry News Recent Updates: Look for articles on any changes to health benefits due to industry-wide shifts or specific to Evercore. Healthcare Trends: Innovations or shifts in benefits plans, such as increased telehealth services or mental health support. 4. Employee Reviews (Glassdoor, Indeed) Employee Feedback: Employees often share their experiences with health benefits, which might highlight recent changes or issues. Healthcare Terms: Look for mentions of specific programs or benefits that employees find notable or problematic. 5. Benefits Aggregators Comparisons and Details: Sites like Benefits.gov or benefits-focused forums may offer comparisons of Evercore’s benefits with industry standards.