Medical truth no.2: Your health will cost you more than you can expect
The other hard-to-swallow truth is the fact that healthcare and upkeeping it will cost you way more than you could ever imagine. And we’re not just saying this to scare you! A study from 2019 found that an average couple retiring at 65 ends up having to spend about $285,000 just on medical costs over their whole retirement years. And as we mentioned earlier, not all of those will be covered by Medicaid!
It’s for the best if you end up investing in such things as HSAs (health savings accounts), which will be separate from the rest of your savings accounts. That way, those funds can help you if there are any medical costs that are unexpected after you retire. Moreover, it can be a saving grace when you can pull money from that account and not from your 401(k) plan or other nest egg you may have. It’s amazing if you can make this account and forget you have it, even while you are young!
After all, you never know when medical expenses may occur, and it’s better to be prepared!
3 Responses
A lot of truths were spot on. Disappointed to see that there was no mention of Medicare Advantage Plans available from numerous major insurance companies that will pay a lot more than straight Original Medicare. Copay’s are modest and mostly all costs are fully paid when you hit the maximum out of pocket level. There is also the Gap coverage option. This is important info that should have been included.
My spouse and I waited until age 70 to start collecting social security which has made a big difference for our long term plans. The 8% increase per year for the four years after our age 66 regular retirement age gives us 32% more.
We have a moderate LTC plan which has a reasonable rate which will help IF we need it later in life.
This article does not address the federal taxes you will have to pay on those benefits based on ridiculous levels of income that have not been adjusted for years.