According to a 2012 survey by the Insured Retirement Institute, the average person covered by Medicare will have out-of-pocket medical expenses in excess of $4,300 a year (or $8,600 for a couple). The same report found that 63% of baby boomers lack the confidence that they will have enough money to fund their medical expenses in retirement.¹
With health care expenses in the spotlight, it’s incumbent upon us to make sure our retirement strategy anticipates these costs.
But that’s not enough.
Remember, health-care coverage (including Medicare) typically does not cover extended medical care. And it’s a prospect we shouldn’t overlook.
The Department of Health & Human Services estimates that about 70% of people will need extended care at some point in their lives.²
These annual costs can range widely based on geographic location, from over $57,000 in Oklahoma to over $240,000 in Alaska.³ When Baby Boomers were surveyed, only 24% said they were “extremely” or “very confident” in meeting extended care costs for themselves and even less—14%—were “extremely” or “very confident” in covering the costs for their parents.⁴
Finally, you may want to consider a Medigap policy, which may help cover some of the health-care costs not covered by Medicare.
Making sure that you are properly insured for your medical costs may help strengthen the foundation of your retirement.
- Insured Retirement Institute, January 2012
- Department of Health & Human Services, June 2014
- Genworth Cost of Care Survey, 2014
- Insured Retirement Institute, 2012.
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