According to a 2012 survey by the Insured Retirement Institute, the average person covered by Medicare will have out-of-pocket medical expenses in excess of $4,300 a year (or $8,600 for a couple). The same report found that 63% of baby boomers lack the confidence that they will have enough money to fund their medical expenses in retirement.1
Money that Buys Good Health is Never Ill Spent
By Peter Smith, CLU
With health care expenses in the spotlight, it’s incumbent upon us to make sure our retirement strategy anticipates these costs.
But that’s not enough.
Remember, health-care coverage (including Medicare) typically does not cover extended medical care. And it’s a prospect we shouldn’t overlook.
The Department of Health & Human Services estimates that about 70% of people will need extended care at some point in their lives.2
These annual costs can range widely based on geographic location, from over $57,000 in Oklahoma to over $240,000 in Alaska.3 When Baby Boomers were surveyed, only 24% said they were “extremely” or “very confident” in meeting extended care costs for themselves and even less—14%—were “extremely” or “very confident” in covering the costs for their parents.4
Finally, you may want to consider a Medigap policy, which may help cover some of the health-care costs not covered by Medicare.
Making sure that you are properly insured for your medical costs may help strengthen the foundation of your retirement.
- Insured Retirement Institute, January 2012
- Department of Health & Human Services, June 2014
- Genworth Cost of Care Survey, 2014
- Insured Retirement Institute, 2012.
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