Podcast Episode 470: Retiring at 65? You May Need $185,500 for Healthcare Costs
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A 65-year-old who retires in 2026 can expect to spend about $185,500 on healthcare and medical expenses throughout retirement. This is according to Fidelity’s latest Retiree Health Care Cost Estimate. But these figures don’t tell the whole story, as longer lifespans and potential long-term care needs can drive costs even higher.
In this episode of Money Wisdom, Nicholas J. Colantuono, CFP® and Eric Hogarth, CFP® explain how creating flexibility in your retirement plan can help protect against the rising cost of healthcare.
Optimizing Your Medicare Choices
As you approach Medicare enrollment time, it’s important to familiarize yourself with the plans available. Certain parts of Medicare help pay for inpatient and outpatient care, hospital stays, and prescription drugs. However, the largest expense many people face is long-term care. Medicare generally does not cover these services, which may include memory care units, nursing home facilities, and assisted living communities.
In the broader conversation around healthcare budgeting, it’s important to plan for more than just your routine care. Preparing for unexpected costs and the possibility of long-term care is key to building a well-rounded financial plan.
Are you wondering if you’re ready to retire? Get your free Are You Ready to Retire? Starter Kit by texting “KIT” to 800-757-0436.
Managing Your Savings with an HSA
If you’re still working, a health savings account (HSA) can be a great tax-advantaged tool to help save and pay for qualified medical expenses. You get a tax deduction for your contributions, the money grows tax-deferred, and it comes out tax-free.
Keep in mind, you cannot save into an HSA after you retire, but you can keep the account. So, if a high-deductible health plan is the right fit for you, now may be the time to start maximizing your HSA contributions.
Planning Proactively for Additional Expenses
Your retirement plan should balance both money for current needs and emergencies and assets positioned for long-term growth. As medical costs continue to rise, planning proactively can help preserve flexibility and avoid having limited choices down the road.
Consider coordinating your insurance, tax, estate, and investment decisions with an experienced advisor. They can help you prepare for the “what-ifs” and build a practical plan that protects your retirement savings and income.
