If you're planning for retirement, don’t forget the cost of healthcare. As you age, the portion of your budget consumed by health-related costs is likely to rise. Although Medicare may cover many of your costs, you’ll still have deductibles, copayments, and the expense of coinsurance. If you’re not prepared to meet those costs out of pocket, you may want to consider purchasing a supplemental insurance policy.
In a 2015 study, researchers estimated that the average 65-year-old married couple will need at least $260,000 in savings just to meet their insurance premiums and out-of-pocket health care costs during retirement. Over the last fifty years, health care costs have risen more than 6% per year, considerably faster than inflation, and a trend analysts expect to continue over the coming decade.
People all around the world are living longer lives. And as wonderful as this longevity boom is, living longer requires financial planning. With medical care becoming more expensive and health care inflation expected to remain significantly above increases in Social Security, health care will be among the most significant expenses for Americans in retirement.
Taking action now to create a long-term plan can allow you to have confidence and greater financial security in the future.
Sources: U.S. Department of the Actuary; Retirement Health Care Cost Data Report, HealthView Services, 2015.