How Retirees Can Control Their Healthcare Costs

Retirement is the golden period of your life, provided you plan for it. During retirement, you are most likely to spend a large sum of your money on housing, transport, and most importantly, healthcare expenses. Your health has a direct relation with your financial wellness and retirement readiness. As per a recent study conducted on people between ages 50 and 64, approximately 45% were not confident about their ability to afford health insurance and related costs during retirement. As per Fidelity, an average 65-year-old couple retiring in 2021 will require at least $300,000 (after tax and as per the present dollar value) to cover their healthcare costs. This figure is exclusive of long-term care expenses. A person turning 65 has a 70% chance that they may need long-term care for the later years of their lives, according to the U.S. Department of Health and Human Services.

Some of the main causes of steeply rising healthcare costs in the U.S. are increasing life expectancy, sharply increasing healthcare inflation, and the gap between the average retirement age (62 years) and the eligible age for Medicare (65 years or older). This has been a cause of concern for people planning to take early retirement, as they might need to shell money out of their pocket towards healthcare expenses. A professional financial advisor can help you to set up a Health Savings Account (HSA) to set aside money on a pre-tax basis to pay for qualified medical expenses.

The above statistics make it clear that healthcare will likely consume a big share of your retirement income. As per some estimates, you can even expect to spend more of your retirement corpus on healthcare than other expenses. But even though these figures look alarming, you can control your retirement healthcare costs by proactively planning for them. Sound long-term planning clubbed with healthy lifestyle choices can help you stay physically and financially fit.

Here are some tips to help you keep your retirement healthcare costs under control:

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