Planning Healthcare Costs in Retirement

Don’t be like others who underestimate healthcare costs during retirement. It can be the greatest mistake you will ever do in your life if you did so. It is best to build health care costs into your retirement plans than have regrets later on.

Yes, once you turn 65 years old, you can have Medicare. But take note that it does not cover all your health care needs, and not all of the parts is offered for free. Medicare Part B has premiums that you have to pay same as prescription plans.

You will still have out-of-pocket costs despite having Medicare under your belt. And this one can be debilitating and excruciating not just on you but also on your finances and even assets.

When you estimate all the factors that can contribute to your healthcare costs, Medicare can only cover about 50-60% of your healthcare needs and out-of-pocket and premiums will just go higher over time.

hospital charges and retirement

How Come People Forget about Healthcare Costs?

Upcoming retirees often forget to factor healthcare costs in their retirement plans because, when they are still employed or are still in the workforce, their employers often picks up the tab (about 75% of the cost) and the rest will come out of their paycheck. They fail to realize that everything will be different during retirement because it will be now their sole responsibility to pay the whole of their health care needs and premiums on top of out-of-pocket costs.

How Much Healthcare Costs You Might Face?

estimated healthcare costs in retirement

Estimated healthcare costs in retirement


Recent Fidelity Investments study projects that people can expect to face up to $245,000 healthcare expenses during retirement or the rest of their lives. This is a 70% increase from the last estimate in 2002. The thing is, it is highly possible to increase as the years go by.

Sad to say, you need to double the numbers for married couples. Tsk tsk!

What Can You Do to Lessen Your Healthcare Costs?

Fortunately, there are some steps that you can take that will help you lessen the burden of expensive healthcare costs.

healthy old people


  1. Be healthier and improve your health literacy!

You don’t want to spend your golden years sick and weak, right? So, as early as possible, take charge of your health and medical care. Track your medical history and see how you can avoid the health risks that you have. Research and ask a lot of questions about your health. Make necessary lifestyle changes to be on a healthier side.

  1. Arm yourself with the right protection

It is hard to get caught off-guard, you have to believe that rising healthcare costs are real and you need to face it someday. The best you can do is to plan and prepare for it as early as possible. Protect yourself with the right health insurance. Once you have Medicare, make sure that you will have a Medicare supplement plan to fill the coverage gaps in Original Medicare. As I have mentioned above, Medicare will only cover about 50-60 percent of your health care expenses; Medicare supplement plan will take all or part of those remaining which lessens your out-of-pocket costs dramatically.

Request a Medicare Supplement quote at freemedsuppquotes

Make the most out of your time to check which plans will best suit your needs. Looking at Medicare supplement quotes will help you see the different prices from various insurance providers and find who offers the plan with best deals. Know that supplement plans are standardized, meaning all ten plans offer the same benefit no matter who provides it.

  1. Manage distributions Tax-efficiently

Take note that if you are high-income earners, you can expect of higher Medicare Part B premiums and Medicare Part D premiums. You can work with a reliable tax planner or a retirement planner to help you manage your distributions more tax-efficiently and hopefully keep your premiums from increasing so much.



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