OAKBROOK, Ill. (6/18/13)--Today's preretirees can expect to live longer than those of previous generations--and with more serious illnesses and chronic conditions like high cholesterol, high blood pressure, and obesity. This trend will be costly (Advocate Health Care June 9).
According to Urban Institute findings, you can plan on spending about 30% of your income on health care expenses in retirement. Will you be able to afford the care you'll need?
Your planned-for Social Security and pension benefits might not be adequate, health and vigor likely will decline, Medicare won't cover long-term support and services--in short, life could get a lot harder.
For many, one solution to not having saved enough for health care in retirement is to stay in the work force longer. But what if you get sick and have to retire? If you're not at least age 65 and covered in part by Medicare, this could seriously deplete your savings.
Even if you retire early and keep your health, it's a double whammy: A new report by the Health Care Cost Institute finds that early retirees will pay even more dearly for health care. The report estimates costs at $146,400 for someone age 65 who lives 20 more years, and $372,400 for someone retiring at age 55 and living 30 more years.
Here's how you can prepare today to afford health care in retirement:
In addition, find ways to save and invest more money for retirement, now. Consider starting a health savings account (HSA). A high-deductible plan with a health savings account could save you a lot of money if you're single and rarely go to the doctor. For related information, read "Medigap Helps Pay Out-of-Pocket Costs" in the Home & Family Finance Resource Center.