$280,000 for Healthcare! Really?

By Joe Globensky, RFC®

healthcare costs

Fidelity just updated their research on the estimated cost of healthcare for a 65-year old couple throughout their retirement. Their research indicates that it will now cost as much as $280,000*, and they are probably correct based on their assumptions. We all know about the rising cost of healthcare, regardless of age, and this is one reason why I recently attended a conference focused on helping seniors with these rising costs. Let’s look at some of the assumptions used in this study and how these estimated costs can be reduced.

The first assumption is that once you turn 65, you will enroll in Original Medicare Part A (Hospitalization) and Part B (Medical). For those of you that don’t know, you enroll in Medicare as an individual, not as a couple. Everyone who enrolls in Medicare will pay their respective monthly premium. For 2018, this cost will be approximately $1,600 for the year per person, assuming no adjustment or penalty due to higher income levels.

With Original Medicare, you have deductibles to meet, and then a 20% share of most costs.  Depending on the care you need, this could easily exceed $280,000, so the research includes assumptions based on an average level of care. Which one of us wants to assume they are average? That’s why it is important to learn about Medicare Supplement (Medigap) and Medicare Advantage plans. These plans can help you keep your annual healthcare expenses to a much more reasonable level.

Plans may include coverage for prescription drugs, or you may need to purchase a standalone prescription drug plan (Part D). While this may help control the rising costs of prescription drugs, it is not the only tool you can use. Apps like GoodRx make comparing prescription drug prices easy and may help you find lower prices on your prescribed medications. You can also use resources available through your doctor or pharmacy, such as discount drug coupons or cards, to save additional money.

Another assumption in the research is that the $280,000 figure does not include the potential cost of a long-term care event. While none of us would choose a medical condition requiring long-term care, statistics say that some of us will not have a choice. Genworth has compiled a Cost of Care survey since 2004 that provides data on long-term care costs nationally, and at the local level. And while the numbers can seem quite high, a little planning can significantly reduce the potential financial costs.

You worked your whole life to get to retirement. Now is the time for you to enjoy it without worrying about your potential healthcare costs. At Connections Financial Advisors, we want to help you keep as much of your hard-earned money in your pocket as possible. Talk to one of our advisors today on how we might be able to help you save money on your future healthcare needs.

* Fidelity Retiree Health Care Cost Estimate, an average retired couple age 65 in 2018 may need approximately $280,000 saved (after tax) to cover health care expenses in retirement.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Companies mentioned and their respective services are not affiliated with LPL Financial.

Recent Posts

5 Mistakes to Avoid in Beneficiary Designations

Naming a beneficiary can be an easy way to ensure your loved ones will receive their inheritance directly without waiting until the rest of your estate has settled.  But beneficiary designations can also be problematic so you should make sure they are correct since mistakes can be costly.  Here are five critical mistakes to avoid when dealing with your beneficiary designations.

Outlook 2020: Bringing Markets Into Focus

We expect the U.S. economy to continue to grow in 2020 and support gains for stocks, although we are increasingly mindful of our position in the business cycle…

Thanksgiving Recipes from Our Team

By K. Bridget Schneider, CFP®, CRPC® Thanksgiving Day is approaching fast.  This celebration evokes different memories for each of us.  But for many, it suggests thoughts of food and best-loved dishes we may only see at holidays.  We thought it...

4 Ways A Small Business Can Benefit From a Financial Advisor

By Joe Globensky, RFC® As a financial advisor and small business owner, I know firsthand how my knowledge and experience has helped our company.  But if you have your own small business, you might not realize the value a financial advisor can...


Office: 217.605.8130
Toll-Free: 844.305.7670
Fax: 217.666.4188

604 N Union St Ste 1
Lincoln, IL 62656

Email Us


Sign up to receive the latest news, tips, outlooks and more:

Where are you located?

We are located in Central Illinois in the town of Lincoln. We also have an office in Plano, Texas. We work with a national clientele and will be happy to serve you.

Can I learn more about your services?

Sure. We advise clients on investment management, retirement planning, and other financial matters to help manage what they have. Because, many people save and invest, but they aren’t really sure they’ll have enough assets to be comfortable and do what they want in retirement or later stages of life. We show them whether they are on target or not. We can help you, too.

Would you like a no-cost, initial conversation to learn if you’re on track?

Yes, Thanks.