The overlooked $1,500 annual risk to retirement savings

The rapid rise of GLP-1 drugs is creating an unexpected financial strain, according to a new survey.

Half of GLP-1 users worry they may have to decide between paying for their medication and saving enough for retirement, according to Nationwide Retirement Institute's Healthcare Costs Survey of 1,933 adults conducted last summer. Nearly a quarter, or 24%, said keeping access to the medication matters more to them than boosting retirement savings, according to the research arm of Nationwide insurance company.

A separate Virginia Commonwealth University study found that median annual out-of-pocket spending for a GLP-1 user topped $1,500, and nearly one in five spent more than 10% of their yearly household income on these drugs. The study said uninsured people and those with lower incomes faced the greatest burden.

"GLP-1s are forcing financial tradeoffs," said Kristi Rodriguez, leader of Nationwide Retirement Institute. "It's forcing a new retirement conversation."

How are users responding?

More than half of current GLP-1 users, or 54%, have already changed their financial habits because of the medications' high cost, the survey found. About 17% have taken on debt such as credit cards or loans, 14% have pulled money from savings, investments or retirement accounts, 14% have cut retirement contributions or investments, and 10% have delayed or skipped other medical care.

Some of those choices are tied to the optimism the drugs create, the institute said. Nearly 88% of current users said GLP-1 drugs make them feel more hopeful about their long-term health, and 64% said they may retire later because the medication makes them feel healthier.

Nearly 59% said the expected health benefits make them feel less pressure to increase retirement savings, while 57% said those benefits make them less worried about needing extra health or long-term care insurance later.

What should users keep in mind?

"Living longer and healthier is good, but it also means you need more money," Rodriguez said. "A good percentage may work beyond retirement age but the flip side is longevity. Living longer also means your money may need to last longer."

People who stay on GLP-1 medications over time, and many may do so for life, will need more money to keep buying them. Nearly 60% of current users said they worry about affording GLP-1 medication in retirement.

"People think GLP-1 is important, and they're spending money now," said Patrick Simasko, an elder law attorney and financial adviser at Simasko Law. "Then, they don't have a retirement account and have to rely on some other means for retirement, like Social Security or their parents' money."

Simasko said that is not a strong plan. Depending on parents' money is risky because "they may live too long, the brother can sneak in and put it all in his name, or it can get scammed," he said. He also noted that Social Security benefits could be reduced in 2032 unless Congress acts soon.

Rodriguez said everyone, especially GLP-1 users, should meet with a financial adviser and build a plan that supports a comfortable and possibly longer retirement while also leaving room to keep paying for the medication. She also pointed to online tools such as Nationwide's health care costs in retirement calculator as a starting point for estimating how uncovered health costs may affect retirement savings plans.