Baby boomers take note. Your healthcare in retirement may have just gotten pricier, as suggested by a recent study. Will that affect your financial ‘health?’ Find out, in this week’s Steady Investor News…
Healthcare in Retirement is Getting Costlier…Is Your Nest Egg Covered?
You may face some of the biggest expenses in retirement, and healthcare is potentially one of them. According to a research by Fidelity Investments, a healthy 65-year old couple retiring this year will have to bear healthcare costs of $275,000 in retirement, +6% higher than last year’s estimate of $260,000. The trend has been mostly upwards over recent years, and is estimated to be +70% higher compared to Fidelity’s 2002 retiree healthcare estimate (according to a Bloomberg report).
While Fidelity’s estimate includes premiums, cost-sharing provisions and out-of-pocket costs associated with Medicare parts A, B and D, those are not the only healthcare costs you may encounter in retirement. Dental care and over-the-counter meds could take up additional bites out of your savings pot.
So, will the rise in healthcare costs drain your retirement funds? Not if you have a solid retirement plan.
Healthcare is one of the necessary aspects of a comfortable retirement. You cannot cut back on looking after your health (and therefore endanger it) just because medical costs are rising. Instead, what you should do is plan ahead, so that increases in retirement expenses don’t create a drastic dent in your living standards in other areas. In essence, what you need is a savings and investment discipline that can take care of your financial needs for different time horizons.
Key Takeaway for Investors
Healthcare and other increasing expenses should be much less of a burden if you get into an effective financial discipline – one that grows your wealth while meaningfully navigating you through changing prices and other market conditions. It is great to start off as early as possible, but financial planning need not stop after retirement. At Zacks Investment Management (ZIM), we guide our clients through various steps of retirement planning – how much to save, where to invest, how to determine you risk tolerance and time horizon and much more. That way, we help individuals feel confident and more in control of their financial future. To understand if your current plan is taking care of your financial needs, time horizon and risk tolerance, feel free to call us at 1-800-701-9830. We’ll be happy to take your questions and give you a free portfolio review.
We have also put together a guide to help you make educated decisions on retirement planning. What are the different types of retirement accounts and their contribution and withdrawal limits? How and when to start planning for retirement? What are the best ways to build a solid nest egg? Get answers to these and much more in our guide, “4 Steps to Managing Your Retirement Assets.” To get your free copy, click on the link below:
Disclosure