As Health Premiums Rise, 1 in 8 Workers Cut Retirement Savings, LIMRA Research Finds
EmitenTrust.com - As open enrollment gets underway, a new LIMRA Retirement Income Institute paper shows that coordinating healthcare and income decisions can be worth thousands of dollars a year in retirement
WINDSOR, Conn., Oct. 28, 2026 /PRNewswire/ -- One in eight workers whose health insurance premiums rose this year responded by putting less into their retirement savings, according to new LIMRA research. As Americans make coverage and benefit choices during their employer's open enrollment period, the findings show how healthcare decisions made today can shape financial security in retirement.
These findings reinforce a key conclusion from a new LIMRA Retirement Income Institute paper, Redefining Advice: Integrating Healthcare Into Retirement Planning, which argues that healthcare planning should be a core component of retirement planning rather than a separate financial consideration.
LIMRA's 2026 Benefits and Employee Attitude Tracker (BEAT) Study found that more than three-quarters (77%) of employees enrolled in workplace medical coverage saw their premiums increase in 2026, including 17% whose premiums rose by more than 10%. About half of those facing higher premiums changed their spending or benefits decisions in response:
- 20% cut back on everyday spending.
- 12% reduced retirement savings contributions.
- 16% reduced spending on other employee benefits.
- 16% switched to a less expensive medical plan.
- 9% chose not to enroll in other benefits.
Younger workers were the quickest to react. Nearly three in four Gen Z employees whose premiums increased took some action, and 21% cut their retirement contributions — the workers with the most time to benefit from long-term savings growth.
"As consumers evaluate their healthcare options during open enrollment, it's important to recognize the connection between healthcare decisions and retirement readiness. Increasing healthcare costs can put pressure on household budgets today while making it more challenging to save for the retirement people envision tomorrow," said Kimberly Landry, Research Director, Workplace Benefits Research at LIMRA and LOMA.
High-stakes choices, made quickly
Open enrollment decisions can affect household finances for years, yet LIMRA found that 63% of workers spend less than an hour reviewing their options and enrolling, and more than a quarter spend less than 30 minutes.
Those decisions are being made under financial strain. Nearly half of workers (49%) are very or extremely concerned about healthcare and health insurance costs, and 57% are more worried about those costs than they were a year ago. Forty-two percent are concerned about their ability to save enough for retirement. And 55% would need to borrow or finance an unexpected $2,000 medical bill not covered by insurance — or could not pay it at all.
Budgets for benefits are tight. Workers are willing to spend a median of $150 a month on workplace benefits, excluding retirement savings. That is roughly a quarter of the $571 average monthly worker contribution for family medical coverage, according to KFF. As medical premiums consume more of that budget, less is left over for other priorities and for protection such as life and disability insurance.
Why healthcare belongs in the retirement plan
Jae W. Oh, M.B.A., CFP®, author of the paper and a fellow of the LIMRA Retirement Income Institute, examines how healthcare costs, taxes, and retirement income decisions interact and ultimately influences how much money retirees have available to spend.
"Successful retirement planning should focus not simply on how much income someone generates, but how much remains after taxes and healthcare expenses," said Oh. "That's why healthcare needs to be part of the plan from the beginning."
The connection matters more this year. Healthcare costs are tied to income: premium subsidies for Affordable Care Act (ACA) marketplace coverage shrinks as income rises. With the enhanced ACA subsidies expired at the end of 2025, households with income above 400% of the federal poverty level no longer qualify for any premium tax credit — a "subsidy cliff" that can make a single retirement account withdrawal or Roth conversion very expensive.
Five things consumers can do this open enrollment
- Look beyond the premium. Compare deductibles, prescription coverage, provider networks and total potential out-of-pocket costs, not just the monthly price.
- Protect retirement savings if you can. Cutting contributions eases pressure today but can leave a bigger gap later, especially for younger workers, who have the most time for savings to grow. If you must cut back, try to keep contributing enough to receive any employer match.
- Retiring before 65? Watch your income. For marketplace coverage, an IRA withdrawal or Roth conversion that pushes household income above 400% of the federal poverty level can eliminate premium subsidies entirely.
- Approaching Medicare? Think two years ahead. Medicare uses income from two years earlier to decide whether higher Part B and D premiums apply, so a large withdrawal or conversion at 63 can raise premiums at 65.
- Make the Medigap decision at 65 carefully. In most states, the guaranteed right to buy a Medigap policy without medical underwriting comes only once, so switching later may not be possible.
With Medicare open enrollment underway, ACA marketplace enrollment opening November 1, and many employer-sponsored benefits enrollment periods taking place before year-end, LIMRA's research highlights an important consideration for consumers: Healthcare decisions affect more than what people pay today. They also influence how much money is available to save now and to spend in retirement.
Read the research:
Redefining Advice: Integrating Healthcare Into Retirement Planning, linked here.
2026 BEAT Study, linked here.
About the BEAT Study: In January 2026, LIMRA conducted an online survey of 4,052 full- and part-time U.S. workers aged 18 to 64. The sample was weighted to be representative of U.S. employees based on Census Bureau data.
About the LIMRA Retirement Income Institute
Advancing retirement income security through research and collaboration, the LIMRA Retirement Income Institute provides insights and solutions — guided by leading retirement scholars and institute fellows — to help Americans retire with less risk and greater confidence. Visit www.limraconsumer.com/retirement-income-institute.
About LIMRA
Serving the industry since 1916, LIMRA offers industry knowledge, insights, connections, and solutions to help more than 600 financial services member organizations navigate change with confidence. Visit LIMRA at www.limra.com.
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SOURCE LIMRA