Ease the Pain of Health Care Costs in Retirement
by Kimberly Lankford, Kiplinger’s Retirement Report
“This number should hurt a lot: The average 65-year-old couple will pay $240,000 in out-of-pocket costs for health care during retirement, according to Fidelity Investments. And that does not include potential long-term-care costs.
Critical, yes. Incurable, no. The worst thing you can do is take to your bed and expect the pain will go away with an aspirin or two. The best medicine is to make sure your retirement plan takes into account this large line item — and to find ways to cut future costs or develop income streams to pay expenses.
It’s easy to see how the costs can add up. Just Medicare premiums alone for 25 years — for standard Part B (which pays for outpatient care), a Part D prescription-drug policy and a Medigap supplemental insurance policy — will set a couple back close to $200,000. And that does not include dental and vision care, hearing aids, and out-of-pocket drug costs. A Medicare Advantage plan could cost somewhat less. Thank goodness Part A, which pays for hospital care, is free.
In your planning, prepare for unexpected spikes in spending, such as a new dental crown. Also, adjust your estimates for inflation, perhaps by 4% a year. And if you expect to live longer than average, plan for those extra years.
Here are some strategies to ease the pain of an acute case of health care costs.”