health
Couples may need more than $400,000 to cover health-care costs in retirement, even with Medicare
A 65-year-old couple may need about $400,000 to have a 90% chance of covering health costs over the course of retirement.
TL;DR
- A 65-year-old couple may need about $405,000 to cover healthcare expenses in retirement with a 90% chance of success.
- This estimate includes premiums, out-of-pocket costs, and prescription drug spending, which can rise significantly with age.
- Medicare covers many services, but retirees often underestimate their out-of-pocket spending, which can be substantial when they get sick.
- Different Medicare plans (Traditional Medicare with Medigap vs. Medicare Advantage) have varying estimated costs, with Medicare Advantage potentially being lower but having provider network limitations.
- Healthcare costs in retirement can be inconsistent, with potential for high-cost years, necessitating a financial cushion or reserves.
- Financial planning for retirement healthcare should focus on ensuring costs don't disrupt the overall retirement plan, rather than predicting exact expenses.