One of the most common concerns in the world of healthcare is how to properly prepare and budget for post retirement. Projecting future health care costs are not always easy.
Here are 5 important points to consider:
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Inflation:
Although no one knows for sure how fast health care costs will rise, it seems reasonable to build a higher inflation rate into this portion of your budget and assume that your health care expenses might go up by 5% to 6% per year.
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Your Unique Experience:
The Kaiser Family Foundation found that out-of-pocket spending for premiums and health care services totaled $5,021 for people ages 65-74, rising to $5,829 for ages 75-84, and reaching $10,307 for people over 85.
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Longevity
You should prioritize your health and strive to live well, and for a long time. But you should also understand that doing so will not necessarily save you money.
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Potential Loss of Retiree Benefits
As health care costs continue to rise, employers are responding by reducing or eliminating retiree health coverage for new hires and requiring current retirees to pay more for the coverage they have.
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How Much Will You Need?
Determining how much money an individual or couple needs in retirement to cover health care expenses is a complicated process.
Elaine Floyd, CFP®, is the Director of Retirement and Life Planning, Horsesmouth, LLC. Copyright © 2021 by Horsesmouth, LLC. All rights reserved. Denise M. Gage License #: 5173034.
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