Source: Fortune
Summary
Retirees face significant healthcare costs, with some studies suggesting expenses can reach six figures, even for those who have planned carefully. Despite concerns, many people postpone planning due to optimism bias or assumptions about Medicare coverage. However, Medicare is not a complete solution, and retirees can still face out-of-pocket costs. Experts recommend building a “healthcare expense portfolio” with multiple resources, including savings, HSAs, and supplemental coverage. Fidelity estimates that a retired couple may face $345k+ in out-of-pocket healthcare costs over the course of retirement. Effective planning can help build financial resilience and reduce the risk of unexpected costs.
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The numbers tell one story.
Andrew Crowell, a financial expert, highlights the importance of planning for healthcare costs in retirement, citing the significant expenses that can arise even for those who have planned carefully.
Retirees may face out-of-pocket costs, including premiums, cost sharing, and long-term custodial care, despite Medicare coverage.
The article notes that only 23% of Americans have discussed healthcare costs in retirement with a financial advisor.
The situation is reframed as a “second mortgage” that retirees may face, with Fidelity estimating $345k+ in out-of-pocket healthcare costs over the course of retirement.
Experts recommend building a “healthcare expense portfolio” to mitigate these costs.
Author: Evan Null
