Aging Options

Estimated Lifetime Healthcare Costs for Today’s Retirees now $260,000

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There’s a brand new report just released that contains sobering news for anyone about to retire, and we’ve run across several articles in major news outlets about it. Here’s the bottom line: new estimates state that a 65-year-old couple retiring this year will need a whopping $260,000 to cover their health care costs in retirement. That figure is up 6 percent from last year, and it’s the highest figure ever reported since this study began.

The analysis is part of an annual report called the Fidelity Retiree Health Care Cost Estimate. One of the better articles describing what this analysis means was this one from the website of the Washington Post. This just-published article is a real wake-up call for those presently planning for retirement. “Whenever we talk about people’s biggest fears in retirement,” writes the Post, “two things always jump out: the fear of running out of money and health care costs.” Based on the Fidelity report, those worries about health care costs are definitely valid.

Let’s consider that number – $260,000 – in more detail. Fidelity says that figure is based on the assumption that a couple is retiring this year, both age 65, and that the life expectancies are 85 for the husband and 87 for the wife. The figure is broken down this way:

  • 36% of the total cost will go toward monthly premiums for Medicare Parts B and D
  • 40% will cover what are referred to as Medicare cost-sharing provisions – the parts you pay for out of pocket, including co-pays and deductibles
  • 24% will be spent on out of pocket prescription costs.

This dollar figure does not address the costs associated with long-term care – in a nursing home or with in-home assistance.  According to Fidelity, these costs could affect as many as 70% of all Americans who reach 65 over the next five years, so the firm included long-term care protection in their cost analysis. As the Washington Post reports, “Fidelity estimates that a 65 year old would need an additional $130,000 to insure against long-term care expenses.” This presumes that Fidelity’s typical retiree couple is not wealthy enough to self-insure, but too well-off to qualify for nursing home assistance through Medicaid.

The article reveals that the lifetime medical cost estimate of $260,000 for 2016 represents a huge increase – $40,000 – in just two years. Why is this happening? According to Fidelity, rising drug costs and the decreasing use of generics are two of the major culprits.  But regardless of the reason, the rising costs show little sign of abating.  In the words of the Washington Post piece, “the latest numbers are a clarion call to people to be aware of the financial risks of health care costs.” Medical costs will be “one of the biggest obligations they take into retirement.”

What about you? As you look ahead to your retirement years, do you see bright sunshine – or storm clouds? Here at AgingOptions, we want to offer you a way to improve your retirement forecast! With careful planning, you need not fear the prospect of rising health care costs, or any of the other worries that burden most retirees who are unprepared. We can help you plan today for a secure future as you age.

As a starting place, we invite you to join many others just like you for one of our highly popular, no-cost LifePlanning Seminars. These information-packed sessions will introduce you to the concept we call LifePlanning – a comprehensive approach to retirement planning in which every aspect of your retirement is included. Too many so-called retirement planners focus purely on their clients’ finances, but a financial plan is not the same as a LifePlan! A LifePlan covers your financial security, your preferred housing choices, your family communication plan, your necessary legal preparation and provision for your medical insurance coverage. The result will be greater security and peace of mind as you look ahead to a fruitful retirement.

For dates, times and online registration, click on the Upcoming Events tab on our website. Or if you prefer, you can call our office during business hours. Don’t let worry, indecision and lack of preparation rob you of retirement security! Contact us today, and we’ll look forward to meeting you at a LifePlanning Seminar in the very near future.

(Link to www.washingtonpost.com)

Need assistance planning for your successful retirement? Give us a call! 1.877.762.4464

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