Healthcare in Retirement
Updated: Jan 15, 2019
What do you think the cost of Healthcare will be for you in retirement? Many overlook or ignore this cost thinking that Medicare will cover it. The truth is that Medicare isn’t likely going to cover everything.
There will be gaps–determining where they are, and how much those may cost you out-of-pocket during retirement will help you understand the importance of going into retirement being healthy. Here are some facts and figures that may surprise you.
Cost of Healthcare.
A 65 year old couple retiring in 2018 will need $280,000 for medical expenses over the course of their retirement, according to a healthcare study at Fidelity Investments. This number include but not limited to premiums for healthcare, supplemental insurance, copays, LTC expenses, assisted living/memory care. Your actual healthcare cost will be more specific to your circumstance, current health-physical and mental, family history, etc…
Small health-related costs could potentially derail your savings so planning ahead for potential expenses by considering your current health and probability of future health issues that may arise due to family history or lifestyle activities.
Will you need Long Term Care Insurance (LTC)?
Many retirees are surprised to find out that Medicare generally does not cover long-term medical or custodial care. These cost include assisted living, home health care, memory care, and nursing homes…each options have different cost. Some type of LTC insurance will prevent or lessen the effects of these cost on your retirement savings. LTC premiums can even be paid from your Health Savings Acct (HSA).
The main drawback of LTC insurance and why many retirees decide to “risk it” is the cost, the idea that if you don’t use it, you lose it. All of these are legitimate concerns but they may be able to be addressed with new products on the market that cover this area. LTC planning has evolved from just buying LTC insurance. Prudent planning can help the retiree get this benefit by positioning assets properly so that they do not have to pay directly out of pocket to get this protection.
What can you do now.
Start your health assessment…take care of your health so that it can improve your quality of life and help reduce your medical cost in retirement.
Start a diet and exercise plan.
See doctors about chronic issues like back or joint pains that you’ve have been putting off.
Fund a Health Savings Account (HSA) to use during retirement rather than relying on your 401(k), pension, or Social Security to cover medical expenses.
You are the key to your health situation and what you need to do to sustain your health and make it lasting. However, talking to a third party who has your best interest at heart to line up your finances to help protect your lifestyle for now and for the future will be one of the best actions you can take. This will make sure you have the latest information and techniques to help you reduce your worry in retirement.
If this is something you’re interested in having a conversation about, I would love to talk to you. Feel free to request a call or an appointment to start the conversation.