In its 2018 Retirement Confidence Survey, the Employee Benefit Research Institute reported that only about 70% of American workers are confident they will have enough money to pay for medical expenses in retirement. When asked the same question, about 30% of all workers reported they were “not too” or “not at all” confident.
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 your opportunities for an early retirement, if you so desire.
A retired household faces three types of health-care expenses.
1. A household will have the expense of premiums. Premiums might be 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 or direct-deposited, so the premium cost is often overlooked.
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.
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.
WHAT YOU CAN DO NEXT
If you would like to discuss how paying for Healthcare will affect your Retirement Income Strategy, please contact an HCM Wealth Advisor:
Mike Hengehold ([email protected])
Casey Boland ([email protected])
Jake Butcher ([email protected])
Jim Eutsler ([email protected])
Greg Middendorf ([email protected])
Steve Hengehold ([email protected])
Doug Johnson ([email protected])