Feb 10

Planning For Healthcare in Retirement

By Nikki Young, CFP®, Financial Advisor

Planning ahead for health-care expenses in retirement is essential. Fidelity Investment’s 21st annual Retiree Health Care Cost Estimate indicates that a 65-year-old couple retiring in 2022 may need $315,000 to cover their health-care expenses in retirement. This estimate assumes the couple is enrolled in traditional Medicare coverage.1 The cost of your specific health care as a retiree will vary depending on your income, age, health, location, your Medicare or supplemental plans and life expectancy. The following steps can help you prepare for these expenses in retirement and assist in minimizing your health-care costs:


  1. Start Saving Early: Healthcare is the largest expense facing retirees after housing and food, and medical costs generally rise faster than inflation. Saving for health-care costs as soon as possible can strengthen your retirement outlook. The ideal saving vehicles includes Health Savings Account (HSAs), Traditional and Roth IRAs and a standard savings account for maintaining a healthy emergency fund.
  2. Understand the Connection Between Your Retirement Date, Social Security and Medicare: As you near retirement, decisions need to be made about your retirement date and when to claim Social Security. Approximately one-third of “early retirees” who claim Social Security at age 62 do so to help pay for health-care expenses until they are eligible for Medicare coverage at 65.2 If you’re able to delay retirement until age 65 or beyond, you may be in the position to claim Social Security later to receive a larger lifetime benefit.
  3. Be Proactive During the Medicare Open Enrollment Period: The initial 7-month enrollment period for Medicare begins 3 months before the month you turn 65. It will be helpful to review and consider all the Medicare options available to you and their costs. Medicare Part A, which covers hospital stays, is free to most retirees. However Medicare Part B, which covers medical expenses, is optional and requires an annual premium.
  4. Have a Plan for Long-Term Care Expenses: Long-term care, if needed, is a major health-care expense that can derail the potential of having a successful retirement. The median cost of a private room in a nursing home was more than $102,000 in 2019.3 Having an asset earmarked to cover these costs or purchasing a long-term care insurance policy can help reduce the impact of long-term care expenses on your retirement portfolio.

If you need advice on how to plan for health-care expenses for your specific situation, I’m available to meet with you virtually, in our Herndon main office or our Ashburn, Leesburg and Middleburg office. Simply go to nyoung.nwfllc.com to schedule a complimentary, no-obligation consultation.

1, 2 Fidelity Viewpoints, “How to plan for rising health care costs.” August 29, 2022. https://www.fidelity.com/viewpoints/personal-finance/plan-for-rising-health-care-costs
3 Genworth, “Cost of Care Trends & Insights.” https://www.genworth.com/aging-and-you/finances/cost-of-care/cost-of-care-trends-and-insights.html
The opinions in this article are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.



Nikki Young, CFP®

Financial Advisor

Nikki Young CFP Financial Advisor

Financial Advisor

Nikki Young, CFP®

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