Episode 41: What Is the Importance of Health Care Costs in Retirement Planning?

Published: April 1, 2021 | Updated on: April 22, 2021

Thank you for joining us for episode 41 of our Money Wisdom Question Series, where we answer common financial and retirement investment questions. Today’s question is, “What is the importance of health care costs in retirement planning?”

Unexpected Health Care Costs

Not preparing for unexpected health care costs in retirement is one of the top 5 mistakes people make when they create their financial plan. Many people have saved enough money to retire early, maybe at age 60 or 62. However, the reason they keep working is to help pay for their health insurance. They continue to work to get that cost-sharing on health insurance that an employer can provide. Typically, when you’re working, the company pays for part of your health insurance and you pay the other part.

The costs are astronomical right now for insurance premiums. They were supposed to go down with the Affordable Health Care Act, and instead, they’ve gone up.

I had a couple that I was talking to recently who was in their early 60s and about to retire. Yet, they were trying to figure out how to pay $2,500 per month for the next three years for health insurance. A while back, Fidelity did a study that said for a couple during their retirement, they were going to have to pay nearly $300,000 for things that aren’t covered by Medicare and Medicare supplement.

How to Prepare

What we do at Johnson Brunetti when we design a financial plan is create a reserve account just for health care expenses, for those who can afford it. That said, some people only have enough to cover their income in retirement.

For those who can afford it, our team of fiduciary advisors can help set up a reserve account for you – or at least we prepare for it in your customized financial plan. This way, you can get ahead of unexpected health care costs that are likely to pop up during your retirement years.


Health care expenses are a major issue in this country and need to be a focus when building your financial plan, especially if you want to be able to make your money last throughout your retirement.

If you’re working with another financial advisor, ask that question, “What am I going to do about the cost of health care?” And we’re not even talking about long-term care, which is a whole other issue.

For more information, check out my Forbes Article to learn What You Need To Know To Protect Your Assets from unexpected health care costs in retirement.

Thanks for joining me and I hope you found this information helpful!

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P.S. If you enjoyed this topic and want to learn more, download our offer, “Don’t Let Health Care Expenses Derail Your Retirement”.

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