Healthcare Costs in Retirement
Some 35% of the workforce expressed "not very" or "not at all" confidence that they will have enough money to cover their medical bills after retirement in a survey conducted in 2022. No matter how sure you are of your financial situation in retirement, it can't hurt to have a basic understanding of the expenditures associated with maintaining your health. 1
There are three distinct medical costs that retirees must consider.
1. Part B (which pays for doctors and other medical professionals) and Part D (which covers prescription drugs) of Medicare are subject to monthly premiums (which covers drug-related expenses). Part B and Part D premiums are typically deducted from a recipient's Social Security check before it is issued, making it easy to forget about them.
2. Medicare-required copayments for medical procedures that are not covered by Medigap or another health insurance plan.
3. Dental work, eyeglasses, and hearing aids are all services that can be expensive yet are often not covered by health insurance plans like Medicare.
It All Adds Up
Employees were polled on their accumulated retirement assets outside of their primary residence and defined contribution plans.
1. EBRI.org, 2022
2. HVSFinancial.com, 2022