Health Care Costs Cutting into Retirement Preparations

by Erik Brenner on Mar 6, 2020

This is happening in subtle and not-so-subtle ways.

Provided by Erik Brenner – Hilltop Wealth Solutions

You may have seen this statistic before or one resembling it: the average 65-year-old retiring couple can now expect to pay more than $250,000 in health care expenses during the rest of their lives.

In fact, Fidelity Investments now projects this cost at $285,000. The effort to prepare for these potential expenses is changing the big picture of retirement planning.1

Individual retirement savings strategies have been altered. How many people retire with a dedicated account or lump sum meant to address future health costs? Very few. Most retirees end up winging it, paying their out-of-pocket costs out of income, Social Security benefits, and savings.

While couples can save together, individuals also have considerable health care costs as well. Fidelity estimates the costs as $150,000 for women and $135,000 for men. The costs can potentially take up a considerable amount of a retiree’s income – 9 to 14%, according to Fidelity. Per year, out-of-pocket costs, including dental and vision, could run into $3,000 to $8,000 in an average year.2,3

While households have begun adjusting their retirement expectations considering projected health care expenses, businesses have also quietly made some changes. If you can take advantage of employer matching contributions, take advantage of that benefit.

There is no easy answer for retirees preparing to address future health care costs. Staying active and fit may lead to health care savings over the long run, but some baby boomers and Gen Xers already have physical ailments. Barring some sort of unusual economic phenomenon, or public policy shift, the question of how to pay for hundreds of thousands of dollars of medical and drug expenses after 65 will confound many who did not properly plan with a retirement expert such as Hilltop Wealth Solutions.

Erik Brenner may be reached at 574.889.7526 or erikbrenner@hilltopwealthsolutions.com.

Hilltopwealthsolutions.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

«RepresentativeDisclosure»

Citations.

1 – fool.com/investing/2019/12/07/these-5-factors-will-tell-you-how-much-you-really.aspx [12/7/2019]
2 – plansponsor.com/estimates-health-care-costs-retirement-continue-rise/ [4/2/2019]

Health Care Costs Cutting into Retirement Preparations

by Erik Brenner on Mar 6, 2020

This is happening in subtle and not-so-subtle ways.

Provided by Erik Brenner – Hilltop Wealth Solutions

You may have seen this statistic before or one resembling it: the average 65-year-old retiring couple can now expect to pay more than $250,000 in health care expenses during the rest of their lives.

In fact, Fidelity Investments now projects this cost at $285,000. The effort to prepare for these potential expenses is changing the big picture of retirement planning.1

Individual retirement savings strategies have been altered. How many people retire with a dedicated account or lump sum meant to address future health costs? Very few. Most retirees end up winging it, paying their out-of-pocket costs out of income, Social Security benefits, and savings.

While couples can save together, individuals also have considerable health care costs as well. Fidelity estimates the costs as $150,000 for women and $135,000 for men. The costs can potentially take up a considerable amount of a retiree’s income – 9 to 14%, according to Fidelity. Per year, out-of-pocket costs, including dental and vision, could run into $3,000 to $8,000 in an average year.2,3

While households have begun adjusting their retirement expectations considering projected health care expenses, businesses have also quietly made some changes. If you can take advantage of employer matching contributions, take advantage of that benefit.

There is no easy answer for retirees preparing to address future health care costs. Staying active and fit may lead to health care savings over the long run, but some baby boomers and Gen Xers already have physical ailments. Barring some sort of unusual economic phenomenon, or public policy shift, the question of how to pay for hundreds of thousands of dollars of medical and drug expenses after 65 will confound many who did not properly plan with a retirement expert such as Hilltop Wealth Solutions.

Erik Brenner may be reached at 574.889.7526 or erikbrenner@hilltopwealthsolutions.com.

Hilltopwealthsolutions.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

«RepresentativeDisclosure»

Citations.

1 – fool.com/investing/2019/12/07/these-5-factors-will-tell-you-how-much-you-really.aspx [12/7/2019]
2 – plansponsor.com/estimates-health-care-costs-retirement-continue-rise/ [4/2/2019]

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