Don’t Let Health Care Costs Derail Your Retirement

You may be saving for retirement and assuming you’ll be fine, but there’s a certain cost that many people underestimate or don’t include in their retirement planning: health care. According to new data from the Nationwide Retirement Institute, health care costs are keeping roughly a quarter of current retirees from living the lives they expected. Furthermore, 80 percent said that health problems snuck up on them sooner than anticipated. Of course, there’s no getting around the need to pay for health care in retirement, but you can do your part to ease the burden by knowing your costs in advance, buying the right insurance and saving for the bills that lie ahead. The amount you ultimately spend on medical care in retirement will depend on a number of factors — primarily, your health. But according to HealthView Services, a medical cost-projection software provider, the average 65-year-old male today will spend $189,687 on health care in retirement, while the average 65-year-old woman will spend more (because women tend to live longer) — $214,565. Worse, those averages don’t even account for long-term care, which is something that 70 percent of seniors 65 and over are likely to need. According to Genworth Financial’s 2017 Cost of Care Survey, the average assisted living facility in the country costs $3,750 per month, or $45,000 on a yearly basis. The average nursing home, meanwhile, costs $235 per day, or $85,775 per year, and that’s only for a semiprivate room. What should you do, given all that? Well, aim to save aggressively for retirement, investing your money effectively. Consider taking advantage of taxadvantaged accounts such as IRAs and 401(k)s, too. Learn more about Medicare and Medicare Advantage plans in order to see which will likely keep your health care spending as low as possible in retirement. Read up on ways to save money on health care in retirement, too, whether it’s getting ahead of medical issues before they escalate by eating well and exercising or by being savvy about prescriptions.