Managing Healthcare Costs in Retirement
For those who are thinking about retirement, it is important to consider the impact that future health care costs will have on your budget. Although Medicare, the federal health insurance program for the elderly and disabled, will pick up most retirees’ medical costs once they turn age 65, the out-of-pocket costs for premiums, deductibles, and copays can nonetheless be substantial. A study done by Fidelity in 2014 showed that retirees will face medical costs of $220K over their retirement years, or roughly $7K annually. These costs do not include nursing home costs or home health costs, which retirees often face, and which also can be substantial.
Besides budgeting ahead, those preparing for retirement can do the following to try to lessen the impact of future medical costs:
Regardless of the steps you may take in trimming future health care expenses, it is necessary to factor in additional costs for health care expenses in your retirement planning projections.