So many people underestimate the value of their health during retirement. The truth is that Medicare, much like health insurance you receive from an employer while working full-time, likely isn’t going to cover everything you need it to.
There will be gaps in your coverage – it’s just a question of determining where they are, and how much those medical expenses will cost you out-of-pocket during retirement. To truly get a grasp on the importance of being healthy going into retirement, let’s look at a few facts and figures.
The Cost of Your Health
A couple who is planning to retire in the near future can expect to pay an average of $220,000 in medical expenses over the course of their retirement. This number is comprised of a variety of different costs:
- Healthcare premiums
- Supplemental insurance premiums (for prescriptions, etc.)
- Long-term care insurance
- Long-term care expenses
- Assisted living or memory care
These are just a few of the medical expenses associated with life as a retiree. Your unique health costs are going to be specific to you. Your medical history, family’s medical history, and current physical, emotional, and mental health are all critical.
Preparing for the Worst While Hoping For the Best
Nobody wants to imagine a retirement riddled with health concerns. However, even small health-related costs can derail your retirement savings. Your best bet is to plan for potential medical expenses ahead of time by taking stock of your current health, and any future problems you or your spouse or partner may run into.
Will You Need Long-Term Care?
Long-term care insurance can be hugely helpful as you head into retirement. However, your coverage may not cover all instances of long-term care. Estimating the cost of long-term care can be tricky, but understanding that it can be broken into a few different categories can help you get started:
- Assisted living
- Continuing care retirement communities
- Home health care
- Memory care
- Nursing homes
All of these options have different costs associated with them, and are used for different purposes. For example, if you have a family history of Alzheimer’s or dementia, memory care may be something you need to budget for or consider. This is important information to have as you head into retirement.
Do You Have a Family Medical History?
Whether it’s genetic but minor heart problems, or a history of cancer that you’re concerned about, knowing your family’s medical background can be incredibly helpful when determining your potential medical costs during retirement. Talk to family members, and have a conversation with your doctor about the types of medical problems you’re worried about. They can help you to determine whether you’re at risk, and what you can do to prevent medical disaster from striking.
What Does Your Current Health Look Like?
Plenty of pre-retirees are out there running marathons and following a strict paleo diet. However, the majority of us are dealing with a whole host of small-scale health problems that, if left unaddressed, could add up to a serious chunk of change during retirement. Take stock of your current health situation, and get proactive about improving it as you get closer to retirement to avoid any big expenses if possible.
The biggest favor you can do yourself as a pre-retiree is to start your health journey now. Health matters so much during retirement – both to help reduce your total medical expenses, and to simply improve your quality of life. Starting to focus on your health, and preparing for medical expenses during retirement, can mean several different things.
You can focus on your physical health by starting a diet and exercise plan. You can go to see a chiropractor about the back issues you’ve been ignoring for a year or more. You can check in with a counselor or therapist about any worries you have about transferring from a full-time career to full-time retirement. You can start putting funds away in a Health Savings Account (HSA) to use during retirement rather than relying on your 401(k), pension, or Social Security to cover medical expenses.
Only you know what you need to change in your life right now to make a lasting impact on your wellness. However, talking to a third party who has your best interest at heart can help you to line up your health decisions with what’s going to have a positive impact on your lifestyle and your finances. When I work with clients, I firmly believe that having conversations about health, wellness, emotional fulfillment, and lifestyle are all part of the planning process. I want each of them to live their best life – whatever that looks like to them. Sound like something you’re interested in? I’d love to talk to you. Feel free to request a call today to get started.