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3 Strategies for Affordable Healthcare in Retirement

According to recent projections by HealthView Services, a man retiring today with a typical lifespan will need an average of $189,687 to pay for healthcare costs not covered by insurance; a woman will require $214,565. These estimates do not include costs for long-term healthcare.

Unfortunately, many people do not prepare properly for healthcare expenses in retirement because they mistakenly believe that Medicare will cover their needs. Even with Medicare, you will still pay premiums, deductibles and co-pays; if you want coverage for dental, vision, hearing or prescription drugs, you will need to pay for supplemental insurance or out of your pocket.

To help you afford healthcare in retirement, consider these three strategies:

Create a healthcare investment account. After you have estimated your annual healthcare costs, set up a dedicated healthcare savings account. You can use an IRA or, if you have a high deductible insurance plan, you can set up a health savings account (HSA). HSAs offer tax advantages, too -- contributions reduce your taxable income, you are not taxed on what you spend on healthcare from the account, and the account grows free from capital gains taxes. You can contribute up to $3,450 every year (individual) or $6,900 (family); if you are over 55, you can contribute an additional $1,000 per year.

Consider long-term care insurance. Although it is getting harder to find and can be expensive, a traditional long-term care insurance policy can help cover the cost of a nursing home, assisted living, or home care. Annual premiums currently average around $3,500 to cover $150/day for nursing home costs each for a couple in their 60s. You can also look at short-term policies with more limited benefits to make the annual premiums more affordable.

Stay healthy. It is estimated that people in poor health spend $1,700 more every year in healthcare costs than healthy people, so staying in good health provides a real financial benefit.

Contact our Fort Myers elder law attorney for a complimentary consultation on estate and long-term care planning.

Categories: Retirement Planning
dorcey law firm
The Dorcey Law Firm, PLC - Fort Myers Attorney
Located at 10181 Six Mile Cypress Pkwy, Suite C, Fort Myers, FL 33966
Phone: (239) 330-6674
Local Phone: (239) 418-0169