Household medical expenses can add up quickly. Are you preparing accordingly?
In a 2022 Employee Benefit Research Institute (EBRI) survey, 35% of all workers reported they were either “not too” or “not at all” confident that they would have enough money to pay for their medical expenses in retirement. Regardless of your own confidence level, being aware of potential in-retirement healthcare costs helps you understand what you can pay for and what you cannot.¹
Healthcare Expenses Breakdown
A retiree household faces three types of healthcare expenses:
Premiums for Medicare Part B (which covers physician and outpatient services) and Part D (which covers drug-related expenses). Typically, Parts B and D are taken out of a person’s Social Security check before it’s mailed, so the premium cost is often overlooked by retirement-minded individuals.
- Copayments related to Medicare-covered services that are not paid by Medicare Supplement Insurance plans (also known as “Medigap”) or other health insurance.
- Costs associated with dental care, eyeglasses, and hearing aids, which typically are not covered by Medicare or other insurance programs.
It All Adds Up
According to a HealthView Services study, a healthy 65-year-old couple can expect their lifetime healthcare expenses to add up to around $597,389 before accounting for inflation.² Should you expect to pay this amount? Possibly. Seeing the results of one study may help you make critical decisions when creating your retirement strategy. Without a solid approach, healthcare expenses may add up quickly and alter your retirement spending.
Prepare for the Future
How much have you saved for retirement? Are you flagging savings for expected and unexpected healthcare expenses? Consult with your RPA Financial Advisor to ensure your retirement strategy accounts for critical costs such as medical expenses. Also, follow RPA on LinkedIn and Facebook to stay up-to-date on retirement solutions for public sector employees.
The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.