One of the biggest concerns among retirees is how quickly healthcare costs may burn through retirement savings. North Carolina is the most expensive state for healthcare in the nation. If employer provided health insurance in our state is more expensive than anywhere else, how will pre-retirees manage healthcare expenses when they’re not working? Anything is possible with proper planning and preparation. To calculate how much you’ll need yearly for healthcare in retirement, answer the following questions.
1. Are you healthy?
2. What is your family’s health history?
3. Do you expect to be in an assisted living?
4. Will you have Medicare A or B?
5. What percentage of medical costs will Medicare cover?
6. What supplemental insurance will you choose?
7. What will your monthly premium be?
It’s estimated that retirees will need up to $11,000 per year to cover basic healthcare expenses including monthly premiums and out-of-pocket expenses for doctor visits and prescription drugs, but not including hospitalizations, in-home nursing, or assisted living stays. At Alloy Wealth Management, when creating a comprehensive retirement plan for a client, we consider their lifestyle, retirement goals, the age they plan to take their social security, and the age they would like to retire. We evaluate their financial assets and other ways they can generate income in retirement, then calculate estimated annual household expenses, healthcare costs, taxes, funds needed to cover emergencies, etc., and multiply that amount by the years they’re expecting to live past retirement age. We compare that number to what they currently have saved and invested and then create a strategy and recommend a plan.
There is much more that goes into the retirement planning process, and we would love to sit down with you one-on-one to discuss it further. Please call 800-689-3935 to make an appointment to meet with one of our fiduciaries. In the meantime, breathe easier knowing that with proper planning and preparation, even the rising costs of healthcare won’t burn through your retirement savings.