Clarksville, TN – Medicare provides a lot of coverage, but it doesn’t cover everything.
It’s never too early to start thinking and planning for retirement, especially when it comes to the top three expenses: housing, transportation and healthcare.
Even with Medicare, quality healthcare can come with a hefty price tag with premiums, copayments, deductibles and other out-of-pocket expenses to account for.
Finding the gaps
Estimating your future medical costs and planning for them will require becoming familiar with what Medicare will and won’t cover, and the various costs involved. So what can you expect to pay out of pocket should you need one or more of these common services? Take a look.
HEARING AND VISION CARE
$900 – $6,000+
Cost each for hearing aids, batteries and maintenance
Up to $250
Cost of hearing exams and fitting consultations without insurance
LONG-TERM CARE
$87,600
Average annual cost of nursing home care in 2016
70%
of Americans over 65 will need some type of long-term care
DENTAL CARE
$351
Average amount Americans spent per capita on dental care in 2014
$18,590
Amount the average retired couple will spend out of pocket for dental services
Covering your bases
Budgeting becomes crucial to laying the groundwork to pay for those necessary expenses. The good news is there are several approaches to consider.
Allocate a lump sum of money to cover the average lifetime healthcare costs.
Estimate your and your spouse’s projected health needs based on your family history and state of health.
Take a hybrid approach by estimating your costs, buying enough insurance to cover most of your anticipated needs and setting aside a smaller cash reserve for the unexpected.
Look into HSAs since the money saved within them can be used for many of the costs outlined above as well as other qualifying health expenses.
Review the role of life insurance as most permanent life insurance policies allow partial withdrawals or loans for healthcare expenses.
See if you’re covered by an employer-sponsored plan. If you’re still working, you may be covered and some previous employers extend insurance benefits to retirees.
Next Steps
- It’s never too early to start thinking and planning for retirement, especially when it comes to the top three expenses: housing, transportation and healthcare.
- Understand what you can and cannot expect from Medicare, to avoid unexpected medical expenses.
- Your advisor can help add in contingency plans to your retirement income strategy.
Sources: Centers for Medicare & Medicaid Services; medicare.gov; aarp.com; time.com/money; kiplinger.com; “How Much Does Therapy or Counseling Cost?” Depression RSS2, March 29th, 2016; costhelper.com
Material prepared by Raymond James for use by its advisors. Raymond James is not affiliated with any companies mentioned in this material.
