Healthcare in Retirement
Planning for healthcare costs during retirement can be overwhelming. Here are three tips to help you get started.
#1 – Inflation will raise healthcare costs
Inflation happens, even in healthcare. This means that healthcare will cost more at the end of retirement than it did in the beginning. The price of insurance will increase, along with a simple trip to the doctor’s office. On top of this, it is expected that inflation will affect healthcare prices even more for younger generations. It is important to pad healthcare savings in order to cover inflated prices.
#2 — Healthier people need to save more for retirement
It seems counter intuitive that a healthier person needs to save more for healthcare in retirement. But, a healthier person is expected to live longer. This means more years of medical attention that need to be anticipated and saved for. For example, a woman retiring at 55 with Type 2 Diabetes has a life expectancy of 80 years. Her average annual cost for healthcare in retirement would amount to $16,635, totaling $266,163 over the course of her retirement. In contrast, a healthy woman retiring at 55 is expected to live to 89 years. Her average annual cost for health care is less, at $13,165. But, since she is expected to live almost a decade longer, her total cost of healthcare in retirement is going to be much greater–$424,875. Simply put, living longer in retirement means higher healthcare costs that need to be anticipated and saved for.
#3 – Behavior modifications can lower healthcare costs
Behavior has a large impact on a person’s health. Simple behavioral modifications can have an effect on healthcare costs later in life. It is expected that 50% of the population has some sort of chronic illness (high blood pressure, type 2 diabetes, high cholesterol). Yet, many people in this population fail to adhere to their doctor’s protocols—in fact, as many as half do not even take their medication as prescribed. Making simple behavioral changes now, such as taking medication as prescribed and heeding doctor’s recommendations, can have a serious impact on healthcare costs during retirement.
Healthcare can become one of the largest expenses in retirement, so it is important to plan and save enough. If you need help planning for these costs, we are only a call away