Remember the cost of healthcare when saving for retirement

Published: Dec. 6, 2021 at 1:14 PM EST
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RICHMOND, Va. (WWBT) - As we age our health care costs increase exponentially. This is why it’s important to make sure you consider the cost of health care during retirement as you save.

As we age our health care costs increase exponentially. So make sure you consider the cost of health care during retirement as you save up.     

Experts from Fidelity estimate that an average 65-year-old retired couple in 2021 would need about $300,000 dollars in after-tax savings set aside for health care costs. That’s even with Medicare.

It can seem daunting, but our partners at the financial website NerdWallet put a list together of strategies to help us prepare for that cost.

Number one: Take advantage of an HSA, which is also called a health savings account. It allows you to put pretax money away for medical expenses. Also, make sure you plan for long-term care.     

A person turning 65 today has about a 70% chance of needing long-term care at some point, according to the Department of Health and Human Services. This could mean buying a traditional long-term care insurance policy, which can cost thousands of dollars per year, according to the American Association for Long-Term Care Insurance.

You could also set money aside annually for long-term care expenses. You want to get the right Medicare plan, which means finding one that includes your preferred doctors and your regular medications, helping you avoid high out-of-network and out-of-pocket costs.      

Also, always ask questions of doctors and insurance companies and make sure you know what’s covered. The same goes for prescriptions. Get in the habit of asking if there’s a less expensive option for your prescribed medications.

Copyright 2021 WWBT. All rights reserved.

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