Healthcare Costs and Retirement

According to a survey conducted in 2022, 35% of surveyed workers expressed either low or no confidence in their ability to cover medical expenses during retirement. Regardless of your personal confidence level, gaining insight into potential healthcare expenses in retirement can help you discern what is financially manageable and what may pose challenges.1

A retired household encounters three distinct categories of healthcare costs.

  1. Premiums associated with Medicare Part B, covering physician and outpatient services, and Part D, which addresses drug-related expenses. Typically, these premiums are deducted from an individual’s Social Security payment, often escaping the attention of those planning for retirement.
  2. Copayments linked to Medicare-covered services that remain uncovered by Medicare Supplement Insurance plans, commonly known as “Medigap,” or other health insurance options.
  3. Expenses related to dental care, eyeglasses, and hearing aids, typically falling outside the scope of coverage provided by Medicare and other insurance programs.

The Cumulative Impact A study conducted by HealthView Services reveals that a healthy couple at the age of 65 can anticipate lifetime healthcare costs totaling approximately $597,389, not accounting for inflation. This figure serves as a valuable reference point, aiding in informed decision-making when crafting a retirement strategy. Without a well-defined plan, healthcare expenditures can accumulate rapidly and potentially disrupt your retirement financial picture.2

Are You Prepared for the Future?

Workers were surveyed to gauge the extent of their retirement savings and investments, excluding their primary residence and defined benefit plans. Contact DWP today.

1., 2022
2., 2022