Weekend Reading: Retirees: Health Care May Cost Less Than You Think
This article appears as part of Casey Weade's Weekend Reading for Retirees series. Every Friday, Casey highlights four hand-picked articles on trending retirement topics and delivers them straight to your email inbox. Get on the list here.
Health care expenses might be one of your top retirement concerns, and with good reason. Fidelity recently claimed that a 65-year-old couple retiring today will need an average of $315,000 for medical costs. However, evidence and logic suggest this likely won’t be your reality.
READ THE ARTICLEHere’s why: Empirical data on retirement health care spending presents lower numbers compared to the alarming estimates you might see in news articles. The disconnect stems from studies that capitalize all expected health care costs into a lump sum at the start of retirement, making estimates appear exaggerated. In reality, health expenses can be affordable depending on your unique financial situation.
Options afar: Factors like Medicare, supplemental coverage and Medicare Advantage plans play significant roles in reducing health care costs for today’s retirees. For those concerned about expenses in early retirement, there are several strategies available, including staying on a spouse's plan, utilizing COBRA or exploring ACA exchanges, where subsidies based on taxable income can help reduce your premiums.
You can’t predict what health care expenses you might face down the road, but don’t let the headlines or your fear hold you back from your dream retirement. With a little education and planning, it may not be as difficult or costly as you think.