It’s no secret that the amount of money spent on healthcare after retirement is skyrocketing. According to Fidelity Investments, a 65-year-old woman can expect to spend $135,000 on healthcare after they retire. Men, can expect to spend $125,000, since they have a short life expectancy.
Retired Couples Healthcare Insurance
Fidelity stresses that couples need to hold onto $260,000 of their retirement funds to cover Medicare expenses and other out of pocket medical costs. Fidelity says that the raised costs are because of prescription drugs.
These estimates presented by Fidelity do not include long-term health, and assumes that most of retirees are eligible for Medicare. Frank Boucher, a financial planner, offered some tips to Bloomberg on how to steer clear of these rising costs. First, obtain a combination of Medicare and a supplemental policy.
Secondly, take advantage of a health savings account if possible. If you are eligible to have a health savings account, you will be able to contribute to this account with pre-tax work contributions, and also take money out of the account without tax being taken out.
You should also consider working until your 70-years-old if you can help it. People who wait until they are 70 to take their social security benefits, will receive 76% higher benefits than those who take them at 65.
Finally, you can play with the idea of getting an insurance policy called a longevity annuity, which provides money to retired people who have reached the age of 80. These policies are much cheaper than other types of insurance policies out there.
If you are reaching towards the age of retirement, it is time to start thinking ahead about where your finances lie. The last thing you want to do is to get to retirement age and not be able to retire, or not have the cash you need to do the things you want. These numbers are shocking, but not a total surprise.
Do you have medical coding or staffing business that could use extra working capital for the healthcare dips and valleys?