Over the years, we have realized that the healthcare costs are pretty unpredictable and in retirement, they can even come as a surprise, so be prepared for it.
According to Fidelity’s Retiree Health Care Cost Estimate, a 65-year-old couple who retired in 2016 will need $260,000 to cover health care costs during their whole retirement. But you should realize that the costs could be even higher by the time you retire.
It is now a well-known fact that healthcare costs are soaring two to three times greater than the inflation rate, so everyone has to have the reserves to pay for rising health care costs. Now, this may influence your decision about the age at which you decide to retire.
When you reach 65 years of age, you will be able to sign up for Medicare and you can choose to pay for Medicare Part A, which covers hospital stays, but what is obligatory is to pay a premium for Part B coverage for doctor’s visits. One more optional coverage is Part D, for prescription drugs or you could pay a Medigap plans to supplement Medicare coverage.
What if you couldn’t live on your own?
A lot of older people need constant medical care due to illness.
Has it ever crossed your mind that you might need a long-term care in your retirement due to your health issues? As the Department of Health and Human Services found, 70 percent of people in their 60s will need some form of a long-term care. Not all of the aspects of this care are health-related, maybe you will need some simple assistance with the usual activities of everyday life, like eating, dressing, or bathing. Do not be shy about it since you’re not alone.
According to Genworth’s survey, today in an assisted-living facility, the average costs are more than $43,000, and the average cost of a private nursing home room is more than $80,000 a year.
You could get a long-term-care insurance policy which can help you avoid going broke and paying for long-term care on your own. It’s important to note Medicare does not pay for long-term care and long-term-care policies typically cover the cost of care up to a daily limit in your home, nursing homes, assisted living facilities, Alzheimer’s facilities, and hospice care.