One of your greatest expenses in retirement will be healthcare costs.
Healthcare costs are on the rise.
In fact, Fidelity investments has been keeping an eye on this expenses since 2002.
Since Fidelity's first cost estimates in 2002, the estimates have increased by 70 percent.
In the past year, the estimates rose by 6 percent.
According a recent Think Advisor article titled “Retiring This Year? Here’s What You’ll Pay for Health Care,” this is not surprising.
Some of these costs include Medicare co-payment, Medicare premiums, Medicare deductibles, and out-of-pocket prescription payments.
Fidelity now says a couple who retiring at age 65 this year will pay about $275,000 in retirement for healthcare needs.
Although these estimates do assume health care coverage from Medicare, they do not include long-term care or nursing home expenses.
Remember these are merely estimates.
Fidelity makes its calculations based on a hypothetical situation with specific factors.
Everyone is different.
You could pay more or you could pay less.
How can you afford these expenses?
Plan for them now.
Although a reverse mortgage may be tempting, it is not wise to use it to provide income while waiting on Social Security checks.
An option may be to use a health savings account (HSA) as part of your benefits package at work, if one is offered.
Such an account is tax-advantaged and can help you save not in preparation for health expenses later.
Working with an experienced financial planner is also a prudent move to help you prepare for retirement expenses.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Think Advisor (August 29, 2017) “Retiring This Year? Here’s What You’ll Pay for Health Care”