H&R Block Retirees Face Rising Health Care Costs: Insights from Patrick Ray & Tyson Mavar

'With health care inflation outpacing general costs, H&R Block 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, H&R Block 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 H&R Block 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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Sources:

H&R Block Pension Plan: Name of Pension Plan: Look for official H&R Block documents or reports from 2022, 2023, and 2024 to identify the name of the pension plan. Years of Service and Age Qualification: Search for criteria related to eligibility, which often include years of service and age. Pension Formula: Find specific details on how the pension benefit is calculated. H&R Block 401(k) Plan: Name of 401(k) Plan: Identify the specific 401(k) plan name from H&R Block’s reports or plan documents. Eligibility: Determine who qualifies for participation in the 401(k) plan.

Restructuring and Layoffs: In early 2024, H&R Block announced a major restructuring plan aimed at streamlining operations and improving efficiency. This move included a reduction in workforce, affecting around 200 positions across various departments. The company stated that the decision was driven by the need to adapt to the evolving tax services market and to invest in digital solutions. This restructuring is significant due to the current economic environment, which is characterized by uncertainty and rapid technological changes, impacting job security and company strategies.

H&R Block Stock Options (2022-2024): 2022: H&R Block provided stock options to senior executives and key employees as part of their incentive programs. Stock options were available primarily to those in leadership roles and high-impact positions within the company. 2023: In 2023, H&R Block continued to offer stock options, with an emphasis on aligning employee interests with company performance. Options were granted based on performance targets and tenure. 2024: H&R Block maintained its stock option program, with updates to align with market conditions and internal performance metrics. Eligibility remained focused on senior leadership and strategic contributors.

H&R Block Official Site: hrblock.com Health Benefits: H&R Block offers a range of health benefits including medical, dental, and vision insurance. The company provides options for both in-network and out-of-network care, with varying levels of coverage depending on the plan. They also offer Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) to help employees manage out-of-pocket expenses. Glassdoor Glassdoor: glassdoor.com Employee Reviews: According to employee reviews on Glassdoor, H&R Block provides competitive health benefits, including comprehensive medical insurance plans, dental, and vision coverage. The benefits are generally rated positively by employees, with specific praise for the company’s supportive health programs and wellness initiatives. Indeed Indeed: indeed.com Health Benefits: Reviews on Indeed confirm that H&R Block's health benefits include medical, dental, and vision insurance. The company also offers wellness programs and has received feedback about the effectiveness of their health benefits in supporting employee well-being. LinkedIn LinkedIn: linkedin.com Company Profile: H&R Block’s LinkedIn page mentions that the company provides a comprehensive benefits package including healthcare, wellness programs, and retirement plans. Specific details are not always available, but the general sentiment is positive regarding their health benefits. Benefits Guide Benefits Guide: benefitsguide.com Recent Updates: For 2023 and 2024, H&R Block has updated its health benefits offerings to include enhanced telehealth services and mental health resources. There is a focus on providing better access to mental health professionals and expanded telemedicine options as part of their overall healthcare strategy.