Retirement and Health Care Costs
So, how much do you think you’ll need to spend on health care in retirement? If you’re like most, you have no idea.
A survey by Sun Life Financial, released Wednesday, found that 92% of workers said they don’t know how much their health care will cost in retirement.
40% said they have “no idea” what their health care costs are likely to be in retirement, and another 51% estimated less than $200,000 would be needed.
While no one knows for sure, a recent study released in March calculates a 65-year-old couple retiring this year will need $230,000 on average to cover medical expenses in retirement. That number does not include dental services or long-term care.
What can you do? Even though it’s difficult to estimate exactly what will be needed, there are things you can do now to prepare.
- Develop a retirement plan. At The Financial Coaching Center, LLC, we can work with you to help you estimate your retirement costs and how much you should consider saving.
- Buy disability insurance, which will replace a portion of your income if you’re unable to work due to illness or injury, which can keep you from dipping into your retirement fund. 9% of workers have done just that, and most say they’ll never be able to replace the money. Check with your employer first and see if it offers group coverage. If not, give us a call and we can help.
- Get and stay healthy. Do all of those things all of us should do; stop smoking, maintain your ideal weight, and exercise regularly.
- Consider long-term-care insurance. Most people aren’t aware that if they need nursing home care (and about 70% of individuals over age 65 will require some type of long-term care) Medicare won’t pay for it. Costs vary depending upon where you live, but right now the cost of a skilled nursing facility for my 93-year-old mother is $5,500 a month. Those costs are rising at a rate of about 4.5% a year.
As a client of The Financial Coaching Center, LLC, you can do much more than the vast majority of Americans who are doing nothing. We’re ready to help you and your family tackle the issues surrounding retirement. And, as always, the sooner we get started, the better.
