What You Can Expect To Pay For Health Care in Retirement

by Mike Farr HealthView Services www.hvsfinancial.com
(Danvers, MA)

Everywhere you look, there are advertisements on TV for financial service companies such as Fidelity and Principal who are all about following a set financial plan. The ironic thing about that is if you actually do follow that line, you are more than likely heading for a painful end.

Why do I say that? It's simple.

Health Care!

Once you retire and your employer no longer pays for a majority of your health care expenses, you switch to Medicare.

Did you know Medicare only covers about 51% of actual costs?

How many advisors or planners are out there telling you to plan for these new expenses? Very few. If they are, the number is probably not accurate. Instead, they help you plan for taxes, vacations, food, and other things of that nature.

Here is an example of why planning for health care in retirement should be on the forefront of everyone's mind. All of the data is provided by HealthView Services:

Person age 55.
Retires at 65.
Lives to 90.
Wants full medical coverage.
Earns less than $85k per year.
Lives in Ohio (closest to the national average for health care costs)

This person can expect to pay roughly $476,500 out of his or her own pocket throughout retirement! That is an average of about $1,600 per month!

So let's say you will receive a 6% return before retirement and a 3% return during retirement. You would need either $170,000 today or $301,000 at retirement.

And remember, this is just for Health Care!!!

So think of it this way...

Are taxes more than $1,600 per month?
Are vacations or travel more than $1,600 per month?
Is food more than $1,600 per month?

Plan for something that actually needs a solution!

Plan for the #1 expense in retirement!

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