A couple retiring today can expect to spend over $300,000 on healthcare in retirement. Long‑term care is often the biggest unplanned expense. Learn how to prepare and protect your nest egg.
Unlike food or housing, healthcare costs are unpredictable and often rise faster than general inflation. Add the possibility of needing long‑term care (assisted living, nursing home), and the financial risk becomes significant. Understanding Medicare, supplemental policies, and long‑term care insurance is essential.
Medicare (Part A) covers hospital stays (free for most). Part B covers doctor visits (monthly premium). Part D covers prescriptions. It does not cover long‑term custodial care.
Medigap policies cover out‑of‑pocket costs like copays. Medicare Advantage (Part C) bundles Parts A, B, D, often with extras like dental. Choose wisely.
LTC insurance covers help with daily activities (bathing, eating) at home or in a facility. Premiums are lower when you're younger and healthy. Without it, you may need to spend down assets to qualify for Medicaid.
Healthcare inflation has historically outpaced general inflation by 2‑3% per year. That means a $10,000 medical bill today could be $18,000 in 20 years.
Estimate what you might spend on healthcare from retirement to life expectancy, and see the impact of long‑term care insurance.
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According to Fidelity, a 65‑year‑old couple retiring in 2023 can expect to spend about $315,000 on healthcare in retirement (not including long‑term care). Planning ahead is essential.