Are you ready for healthcare costs in retirement?

Healthcare can be one of your largest expenses as you get older. This quiz can help you learn how to minimize and plan for healthcare costs during retirement.

Tags: Healthcare, Insurance, Savings, Be prepared, Retirement
Published: March 24, 2021

When planning for your life in retirement, you want to determine what your likely costs of living will be. It’s important to remember that as you grow older, you may face more medical challenges. In fact, costs associated with healthcare could be among the most prominent expenses you face as retirement progresses.

Are you prepared to deal with the realities of healthcare costs in retirement? Take this quiz to find out.

Learn more about saving, preparing for and living in retirement with our retirement planning toolkit.

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Healthcare is a significant retirement planning consideration

Given the reality that you’re likely to face increasing medical issues as you grow older, there’s little doubt that healthcare will be a major expense category in retirement. As you assess your projected future expenses, be sure to make realistic estimates about healthcare costs.


Medicare is only part of the answer

Medicare helps make health insurance coverage more affordable in retirement. But only the most basic form of Medicare (Part A, referred to as “hospital” insurance) is free for most. Additional forms of Medicare for covering doctor visits, clinic services, prescription drugs and surgical procedures, require premiums. And you’ll still face out-of-pocket expenses.

Health Savings Accounts (HSAs) offer a way to accumulate targeted savings in a tax-advantaged way while you’re still working. Dollars remaining in the account when you retire can be used to pay premiums for Medicare and other health insurance.


Medical costs keep rising

Another reality is that medical costs have been growing at a faster rate than the broader measure of inflation.[1] This means costs of health insurance coverage and other medical-related expenses are likely to increase significantly over the course of retirement. Be sure to take this factor into account as you plan your retirement income needs.


Long-term care is the ultimate concern

If later in life, you should need specialized care, either in-home or in an assisted living or nursing facility, Medicare offers limited support. Consider the benefits of having long-term care insurance (LTCI) in place to help you prepare for what could be debilitating costs during your retirement.

LTCI can be purchased as standalone policies or as a component of certain life insurance policies. Consider meeting with a financial professional now to review these LTCI options. The younger you are, the more affordable these policies are to fund long term care. 



[1] Source: Federal Reserve Bank of St. Louis. Consumer Price Index for all Urban Consumers for All Item (U.S. City Average) was. 18.7% from Dec. 2010 through Dec. 2020. Consumer Price Index for All Urban Consumers for Medical Care (U.S. City Average) was 32.3% during the same period.


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