Healthcare might be one of the most expensive cost categories for you in retirement. And believe it or not, not all Medicare programs are free and can be complex to navigate. So, what are the key questions to begin the healthcare planning conversation?

Question 1: How much will my medical expenses be in retirement?

Your retirement healthcare costs can vary significantly based on your individual health needs, location, and the availability of employer-sponsored retiree health benefits. On average, a 65-year-old couple retiring in 2023 will need approximately $315,000 to cover healthcare expenses throughout retirement.^[1] However, it’s important to note that this figure can fluctuate based on inflation and your personal health circumstances.

Factors contributing to retirement healthcare costs include medical services, prescription drugs, and dental and vision care, which are often not covered by Medicare and may require additional insurance or out-of-pocket expenses.^[2]

Question 2: How much will Medicare cost me?

Medicare is a federal health insurance program primarily for individuals aged 65 and older, as well as certain younger people with disabilities.^[2] It consists of different parts: Part A, Part B, Part C, and Part D for hospital insurance, medical insurance, Medicare Advantage, and prescription drug coverage, respectively.^[2] While most people do not pay a premium for Medicare Part A, there are costs associated with Part B, Part C, and Part D, including monthly premiums, deductibles, copayments, and coinsurance, which can vary based on income and the specific plan chosen.^[2]

Question 3: If I retire before I turn 65, will I get Medicare?

If you retire before the age of 65, you will not have access to Medicare until you are about to turn 65.^[2] So, you may need to explore alternative health insurance options, such as a policy provided through a former employer, private health insurance plans, or coverage through a spouse’s employer.^[2]

Question 4: Should I plan for long-term care?

Long-term care, including assistance with daily living activities and medical care over an extended period, is not typically covered by Medicare.^[2] Planning for potential long-term care needs may involve purchasing long-term care insurance or considering other financial strategies to cover these expenses.

Healthcare is a large part of retirement planning, and it may be detrimental to your savings to ignore it while you’re designing your plan. If you are looking for help with factoring potential health expenses into your retirement blueprint, consider reaching out to one of our professionals today for a complimentary review of your finances.