Calculating Health Care Costs in Retirement
Do you understand the link between health care costs in retirement and your financial security? Many do not. We are here to help you draw a link between the two, which will ultimately lead to a better understanding of the importance of each. Our health care cost retirement calculator will give you the opportunity to estimate your health care costs prior to retirement, allowing you to properly prepare by factoring this figure into your future financial plan.
Importance Of Calculating You Costs In Retirement
Employee Benefit Research Institute studies predict that in the years to come there will be a major deficit in terms of the money retirees require to afford rising health care costs and the income benefits that they have available to them to pay these mandatory expenses. Calculating your health care costs prior to retirement will allow adequate time for you to adjust your budget and save for expenses that will be obligatory to you in your later years.
What Factors Should Be Considered When Calculating Health Care Costs?
Accurately calculating costs is arguably one of the most difficult future costs to measure due to the many variable factors that go into this number. The average life expectancy for a retired 65 year old male is 17 years (82) and 20 years for a female (85), which might be a good starting point in calculating health care costs in retirement. However, many other factors will play a major role in the amount of income needed to afford medical expenses in retirement. If one simply uses life expectancy to calculate their health care costs in retirement serious shortfalls are highly likely.
In addition to life expectancy one must also consider age, gender, height, weight, education, personal medical history, family medical history, exercise, diet, lifestyle, general health status, insurance premiums and out-of-pocket expenses. With all of these contributing factors required to accurately calculate health care costs in retirement you can imagine the complicated algorithm and the likelihood for error. Furthermore, one must consider medical advances and predictions for longer life expectancies. It can all get very complicated, however, it is essential in formulating a useful financial plan for your retirement.
Where Does Medicare Come Into Play?
Though Medicare will cover some medical expenses in retirement, it cannot be heavily relied upon to cover them all. According to the Employment Benefit Retirement Institute, the average healthy retiree can expect that Medicare will cover approximately 51 percent of their health care costs in retirement.
Medicare is a federally governed health insurance program designed to provide retired seniors, age 65 and over, with affordable health care options. The Medicare program itself consists of many different plans, each of which cover certain expenses. Here is a brief overview of each.
– Medicare Part A
“Hospital insurance.” Covers inpatient hospital stays only.
– Medicare Part B
“Medical insurance.” Covers outpatient doctor visit treatments. NO specialists.
– Medicare Part C
“Medical advantage plan.” Combines the benefits of private provider insurance with Medicare Part A & B and may include a prescription drug plan..
– Medicare Part D
“Prescription drug coverage.”
-“Medigap Plans.” Covers the holes within Medicare Parts A and B which are often co-pays, deductibles, extension of certain types coverage and excess charges.
It is important to have a full understanding of each plan, what it covers, and what it does not when factoring in costs to your budgetary retirement plan.
Things To Remember When Calculating Health Care Costs In Retirement
The idea that your retirement will be filled with fun, travel, family time and relaxation is the ultimate goals for all retirees. The reality for many, though, is a bit more stressful. Considering these few things when attempting to calculate your health care costs in retirement will better ensure an accurate figure, offering you greater peace of mind in your golden years.
– Budget for the non-covered expenses
Many services needed by the elderly are not covered under Medicare such as dental, hearing and vision services. Do not forget to account for these in your budget.
– Coinsurance and deductibles
Do your due diligence to research possible deductibles and coinsurance you will be responsible for in retirement.
– Supplemental insurance
Weigh the costs and benefits of purchasing supplemental insurance to fill the gaps.
Save, save, save and save some more!
– Dodge the penalties
Enrolling late in Medicare sticks you with unavoidable lifetime penalties. Don’t be late or you will spend forever paying for it. Literally.
The Role Of Social Security When Calculating Health Care Costs In Retirement
Not all Americans have been fortunate enough in their careers to set aside just over a quarter of a million dollars for health care expenses in retirement. Those who are entering retirement with limited assets will likely rely on their Social Security benefit to cover some of their medical costs. For moderate to low-income individuals this expense may account for a large portion of their Social Security benefit leaving them little to next to nothing remaining.
Use Our Health Care Cost Retirement Calculator For Free Today
A properly configured financial retirement budget must take many fixed and variable factors into consideration. The most difficult and risky of all factors is potential health care costs in retirement, of which is extremely difficult to precisely approximate. This cost is a vital figure in producing a useful budget ultimately offering you future financial security. The underestimation of such a number can have potentially disastrous effects on even the most seemingly prepared retirees.
Use our FREE online health care cost retirement calculator for a reliable, accurate and fast estimate of your potential medical expenses and get the financial peace-of-mind you desire, today. For more information, connect with us on Facebook or contact us today.
What is HealthcareRetirementPlanner.com
Healthcare Retirement Planner (HRP) is a comprehensive solution that helps identify potential problem areas in a retirement plan and design options to minimize the problem.
On an ongoing basis, HRP conducts research and aggregates all data to be used in its analysis algorithm. Pulling from areas such as The Congressional Budget Office, Centers for Medicare and Medicaid, polling individual insurance carriers across the United States along with private research firms, and positions HRP as having the most accurate information and calculations available.
Within the calculation process there are many variables that need to be considered, as the solutions are customized to each individual’s retirement plan. Variables that are required to analyze financial situations include, but are not limited to: age, gender, location, overall retirement income, types of retirement income, inflation and COLA. HRP has simplified this process.
The process of using HRP is straight forward. Simply by answering a few simple demographic questions, entering retirement asset information and income, along with assorted growth rates, you are supplied with a detailed year by year analysis that projects out 20+ years as to how the investors’ current financial plan will be impacted by their Medicare costs and the impact on their Social Security benefit.
Who is Jester Financial?
We are comprised of Financial Professionals, Medicare Specialists, Technology Experts and the foremost authorities on how this one cost will affect your bottom line especially when your health is on the line.
There are many financial institutions that do tremendous work when it comes to asset building, planning for college or creating stock/bond/mutual fund portfolios, but addressing concerns of affording health care costs…well for that, there is us.
Healthcare Retirement Planner was created with one purpose in mind: to provide data, education and tools necessary to help the financial industry create better financial futures and to plan for one of the biggest expenses in not only retirement, but life – their health.
In a time where health costs dominate the media, the political landscape and your bottom line, retirement planning with all of the facts have never been more important.
Origin of Our Data for Healthcare Cost in Retirement
On an ongoing basis, HRP conducts research and aggregates all Healthcare data to be used in its analysis algorithm. Pulling from areas such as The Congressional Budget Office, Centers for Medicare and Medicaid, polling individual insurance carriers across the United States along with private research firms, and positions HRP as having the most accurate Retirement information and calculations available.