According to the Kaiser Family Foundation, the average person covered by Medicare has out-of-pocket medical expenses in excess of $4,700 a year. Premium costs accounted for 42% of the total, while long-term facility costs, medical supplies, prescription drugs, and dental care claim the rest.¹
With healthcare expenses in the spotlight, it’s incumbent upon us to make sure our retirement strategy anticipates these costs.
But that’s not enough.
Remember, healthcare coverage (including Medicare) typically does not cover extended medical care. And it’s a prospect we shouldn’t overlook.
The Department of Health & Human Services estimates that about 70% of people will need extended care at some point in their lives.²
These annual costs can range widely based on geographic location, from over $60,000 in Oklahoma to over $300,000 in Alaska.³ When workers were surveyed, only 14% said they were “very confident” they would have enough money to pay for long-term care in retirement.⁴
Finally, you may want to consider a Medigap policy, which may help cover some of the healthcare costs not covered by Medicare.
Making sure that you are properly insured for your medical costs may help strengthen the foundation of your retirement.
- MedicareResources.org, October 24, 2015 (Based on 2010 data, which is the latest available.)
- Department of Health & Human Services, 2015
- Genworth Cost of Care Survey, 2015
- 2015 Retirement Confidence Survey, Employee Benefit Research Institute
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