When thinking about how you spend money in retirement, do you consider what you might spend for healthcare? You probably should. Fidelity estimates a couple will spend over $280,000 on healthcare in retirement. It is a staggering number. We’ll talk about that in today’s video.
Video: Monday Morning Money Ep. 02: Healthcare in Retirement
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As your thinking about retirement, how do you see yourself spending your money? A few rounds of golf, maybe some other Hobbies? Travel? Spoiling those grandkids?
Those answers are typically what we hear. Most people look forward to the good things. But there is something else we need to consider. It will likely be one of your biggest expenses during retirement.
Stick around we’ll talk about that right after this.
Planning for retirement should be something we look forward to. Once we leave the workforce, we’ll have time to do many of the things we’ve wanted to do, but couldn’t seem to fit them into our daily lives. And people tend to get excited about those new opportunities.
But there are some realities we must face. And one of those are health care costs. A recent study estimated the average couple will spend over $280,000 on healthcare in retirement. That’s a pretty staggering number when you think about it.
It’s even more surprising when you consider this figure doesn’t include premiums for medicare supplements, costs for a nursing home or long-term in home care.
It simply includes things like your part B and part D medicare premiums. Prescriptions, and other common costs like co-payments, and deductibles.
Over a quarter million dollars on health related expenses. It’s Mind boggling! But this will easily be one of your biggest expenses in retirement. And one many people aren’t considering
So what are some of the things you can do to help with these costs? Let’s take a look.
1. Invest in a Healthier Lifestyle.
By this we don’t mean putting money in an account. We mean, make the effort to change some of your habits. Lose weight, exercise more, be more active. Also take time to give your brain a work out. Making healthier choices can help reduce some of those expenses you’ll face later in life.
2. Delay retirement to age 65 when you are eligible for Medicare.
Many people want to retire as early as possible, but one of the major obstacles to retiring prior to age 65 is the high cost of health insurance. Health insurance premiums for a 62 year old couple could easily exceed $1,500 per month. That’s over $54,000 total to get to Medicare.
3. Consider Medicare Supplement Insurance.
Some of the deductibles and co-pays for medicare can be significant. These supplements are designed to help cover some of those costs. These supplements do come at an expense, so consider that in your decision making process.
4. Do you have a Health Savings Account?
Not everybody participates in a high deductible health plan that offers health savings accounts. But if you do, consider maximizing your annual contributions. This money can be used to pay for health related expenses, and the earnings are tax free.
The cost of healthcare in retirement is not something any of us like to think about. But it could easily be one of your largest expenses. And something we should consider in our plans.