The rising health care costs for retired couples is directly related to the content of a recent study. Fidelity stated it perfectly in their recent study done on couples and retirement: “American couples [are] worrying more, [and] planning less.” This produces nothing but more reasons to worry in the future. That’s because the less time you spend planning, the more time you’re allowing new problems to arise—problems such as not being able to afford unexpected medical expenses in retirement.
This disregard for planning is probably the reason why the percentage of couples in the study who are worried “about being able to afford unexpected health care costs in retirement” went from 70% in 2013 to a whopping 74% today.
A couple planning to retire this year, both at age 65, should expect to spend a projected $245,000 on health care costs throughout their retirement—an increase from last year’s number of $220,000, and a 19% increase from 2005 when it was $190,000.
And, if you aren’t retiring this year, are you prepared for this number to possibly be even higher in the future?
Of course, we’re always hearing that people’s #1 fear in retirement is the threat of running out of money, but even that number is lower than the percentage of people worried about health care expenses (although it is still much higher than it should be)…
51% of people in the study said they’re worried “about outliving their savings in retirement,” which is a huge jump from 42% in the 2013 study. This leads me to what I believe are the most troublesome findings from the study, especially when considering the numbers above…
According to the study, “only 21 percent have developed a retirement plan to ensure they do not outlive their savings and the number putting off planning is on the rise, with 36 percent indicating they haven’t even thought about doing so yet (up from 28 percent in 2013). In addition, despite the fact it’s the top concern, 37 percent have yet to consider the impact of potential health care costs on their savings in retirement (up from 30 percent in 2013).”
These numbers genuinely upset me. As a financial advisor who has dedicated my entire career specifically to helping people plan for retirement, it’s upsetting to see how many people there are who still have yet to do so, let alone the amount of people who haven’t even thought about it!
Planning for retirement is one of the absolute most important phases of your life, because it sets the tone for the rest of your life.
There are a lot of factors that you need to consider when it comes to your retirement… For example, today’s average life expectancy is much longer than it was when your parents retired. That is one of the main reasons for this year’s $245,000 projection.
However, today’s longer life expectancy isn’t the only factor influencing this year’s number… We can also expect to see an increase in medical and prescription prices. While Medicare will help to rid you of some of those expenses, what about the unexpected expense of long-term care?
Fortunately, there is an answer to this specific problem. The solution is a unique strategy that allows your monthly income to DOUBLE to help cover unexpected medical costs.
I don’t want to dive too deep into that right now, though. If you want to learn more about this strategy, give me a call at 1-352-561-4571 and I’ll be happy to tell you more about it. I’ll share with you some case studies and see if it could be a good fit for you.
What you need to know right now is this…
Assuming longer life expectancies remain the norm and medical and prescription costs continues to rise, it’s realistic to assume that the cost of healthcare will continue to rise right along with it.
The only way to alleviate fear is to find a solution that will get rid of it. And, yes, there are solutions… You just need to speak to the right people to find them. Solving any type of problem always requires a plan.
Without one, you are leaving way too much to chance, and that is not a risk anyone should be taking in retirement. Unless you want to jeopardize losing everything, start making a plan right now.
Remember… Failing to plan (or doing it the wrong way) doesn’t just affect you… It affects your family, too.