Healthcare Costs and Inflation in Retirement … An examination of how your Out-of-Pocket Medical Expenses, Medicare, and Social Security work together.
HealthCare Costs in the USA today have spun out of control. Everywhere you turn … Annual double-digit price increases are now the norm. Obama Care and HealthCare Costs dominate the headlines. However, the Financial Services industry in 2020 continues to overlook a significant threat to your future comfortable lifestyle: Out -of-P socket Healthcare Costs.
Planning for retirement requires proper long-term budgeting for various expenses. Make sure that you also now include $ 220,000 + for your health care costs.
That's how much the average 65-year-old couple will spend on medical expenses during their retirement, according to the latest study from Fidelity Investments.
And that $ 220,000 is if you are basically healthy later in life. This $ 220,000 estimate does not include the cost of treating chronic diseases like cancer or heart disease.
According to a second study conducted by the Society of Actuaries, people with serious medical conditions spend about twice what the average population does. So you need to take the $ 220,000 estimate and double that cost if you have serious medical issues.
And none of these estimates include the cost of Long Term Care, like Home HealthCare, Assisted Living, or a stay in a nursing home. None of these Long Term Care expenses are typically covered by Medicare.
Many advisors are not including these HealthCare Costs in the planning process. There is a distinct likelihood that many clients are completely unprepared for their inevitable future healthcare costs. These Medical Costs can, and must be, estimated and paid for in the Client's planning process.
The stark Fact is that your Medical costs will most likely escalate during your retirement. Who would actually expect, and plan for, declining healthcare costs in the future ?!
The Retirement Planning process has traditionally focused on financial matters, and that continues to this day. But inflation in Out-of-Pocket Medical Expenses in the United States have become a witches brew: Big bills, with big annual price increases, and big risks to a Retiree's lifestyle. Remember … These are your Out-of-Pocket Expenses.
The HealthCare costs discussed in this article are a very real threat to your long – term financial security because these healthcare expenses are so large, and are rising so fast annually. How do you plan for this kind of lifetime “Medical Inflation?”
“But I'll Be Fine, I Have Social Security and Medicare, Right?”
The short answer is … Yes, and No, and It Depends.
The Message is simple and stark: Plan for large, and escalating, Out of Pocket Medical Expenses in Retirement. We all know first-hand that Medical Expenses have been steadily rising by double-digit price increases for some years now. Double-digit Inflation in Medical Expenses does not appear to be abating. Do you see your Medical Expenses declining, or rising?
And since Nobody gets Youger or Healthier, your Medical Expenses will be with you Forever, until the day that you die, right? And these bills will NOT get smaller … as you get older. Sorry, but Facts. Tough Love. We age, and our HealthCare costs more, right? More things break down, and require repair.
So, confront the problem! Ask Yourself, and your Financial Advisor / Planner … about financially preparing and budgeting for Out of Pocket Medical Expenses in Retirement. These Medical Expenses could become a real Budget-Buster for you and your Standard of Living.
Do not let OOP Medical Expenses become a blind spot and a hole in your Retirement Planning. Remember, these are your personal OOP Medical Expenses … the bills NOT covered by Medicare and / or Social Security!
This article can serve as a real Wake-Up Call and alarm bells for the millions of people heading towards Retirement, Medicare, and Social Security: Plan for OOP Medical Expenses in your Retirement / Financial Planning! Plan Big.