Health care needs
- Medical costs are rising even faster than the rate of inflation.
- Fewer employers are offering health care coverage for retirees.
- Decisions you make now will affect your future health care options.
Nearly everyone near or in retirement is concerned about the cost of health care. In fact, rapidly rising health care costs are a top concern for even high-net-worth households.1
When you consider the fact that we're living longer, this becomes a much greater concern for all, since health care costs generally increase as we age.
Prepare now for retirement and health care costs
With medical costs rising faster than the inflation rate, and fewer employers offering health insurance for retirees, preparing for retirement and health care expenses should be an integral part of any retirement plan.
You can generally plan for 13% of your expenses in retirement to go for out-of-pocket health care expenses. By 2020, a 65-year-old married couple could need $365,000 to $454,000 for insurance premiums and out-of-pocket medical expenses during retirement.2 Unexpected health care costs can rapidly deplete savings if you don't have a plan in place to help cover them.
Consider a range of protection and investment strategies
In addition to growing the savings you'll need to cover premiums and other health care expenses during retirement, there is additional coverage available to help protect your retirement assets. For example, you can add supplemental insurance or long-term care insurance to employer health benefits and anticipated Medicare coverage.
Tips for getting a head start on retirement and health care expenses
- Contact your Human Resources department to see if your employer provides health care coverage for retirees.
- Look into Medicare programs and determine which plans are right for you.
- Investigate supplemental health- and long-term care insurance to cover expenses beyond Medicare.
Health insurance is a concern for many pre-retirees. Instead of worrying about it, plan for it. An Ameriprise financial advisor can help you protect your retirement from the potential impact of rising and unexpected health care costs.
1 Source: "Wealth in America" study, conducted by Northern Trust, 2008.
2 Source: Employee Benefits Research Institute (ebri.org) December 2010 Issue Brief No. 351 Savings needed for Medigap Premiums, Medicare Part B Premiums, Medicare Part D Premiums and Out-of-Pocket Drug Expenses for Retirement at Age 65 in 2020. Based on couples age 65 in 2020 without an employer-based health plan and with median drug costs who choose to save in the 75 - 90 percentile. Does not include long-term health care costs.
Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. Some products and services may not be available in all jurisdictions or to all clients.
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