About 70% of American workers are confident they will have enough money to pay for medical expenses in retirement. In a 2018 survey, 30% of all workers reported they were “not too” or “not at all” confident they would have enough money to pay for their medical expenses in retirement.1
Regardless of whether you’re confident or not, it’s important to have an idea about how much healthcare may cost in retirement. By putting the costs in better perspective, you might be able to better understand what you can pay for and what you can’t.
A retired household faces three types of health-care expenses.
1. A household may have the expense of premiums for Medicare Part B (which covers physician and outpatient services) and Part D (which covers drug-related expenses). Typically, Part B and Part D are taken out of a person’s Social Security check before it is mailed, so the premium cost is often overlooked by retirement-minded individuals.
2. The household should expect to pay for co-payments related to Medicare-covered services that are not paid by Medigap or other health insurance.
3. The retired household should expect to pay for dental care, eyeglasses, and hearing aids, which are typically not covered by Medicare or other insurance programs.
It All Adds Up
According to a HealthView Services study using 70 million actual cases, a healthy married couple, age 65, can expect healthcare premiums to add up to $321,994 over their lifetime. If you include dental, vision, co-pays, and out-of-pocket costs, the total rises to $404,253.2
For a healthy 55-year-old couple who plans to retire in a decade, the number jumps to $498,962.3 Should you expect to pay this amount? Possibly. Seeing the results of one study may help you make some critical decisions when creating a strategy for retirement. Without a solid approach, healthcare expenses may add up quickly and alter your retirement spending.
Out-of-Pocket Healthcare Cost
The cost of healthcare for a 65-year-old couple is projected to increase with age.
Prepared for the Future?
Workers were asked how much they have saved and invested for retirement – excluding their residence and defined benefit plans.
Although healthcare expenses can be daunting, understanding the reality of these costs can help greatly in preparing for the future.
Woodall and Associates understands that individuals face unique challenges as they prepare for retirement, and Jason Woodall can help take the mystery out of preparing for today and tomorrow. Whether your goal is saving for retirement, college savings, or estate strategy, their personalized service focuses your needs, wants, and financial goals and objectives.
The professionals at Woodall and Associates have years of experience in financial services and can help you address your needs of today and for many years to come. They look forward to working with you through all stages of your life, please call (352) 750-3051 to find out more.
Woodall and Associates
110 Cleveland Ave., Wildwood, FL 34785
Series 6, 7, 63, 65 held with LPL Financial
Securities offered through LPL Financial. Member FINRA/SIPC