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How Will I Pay For Health Care In Retirement?

Health care expenses are a major concern for today’s retirees, and those who aren’t planning ahead may find themselves in trouble down the road. With life expectancies rising, today’s retirees can expect to live well into their 80s. Combine longer life spans with rising medical costs — and the fact that health care expenses can skyrocket during a serious illness — and retirees have pressing needs to prepare for.

According to a recent survey, a couple retiring may need to spend up to 92% of their lifetime Social Security benefits on out-of-pocket health care costs.(1) And for people 65 and older, the average health savings account balance is only $4,911.(2) 

Not being adequately prepared for your health care expenses could greatly jeopardize your ability to retire comfortably. And those who retire earlier may need even more assets to cover their health care costs before they are eligible for Medicare. Fortunately, with adequate preparation and personalized strategies, you can help tame health care costs in retirement.

Everyone’s health care needs are different, which is why it’s important to consider factors like your age, health, and family medical history when estimating your potential expenses. 

You also should determine whether you are eligible for any employer-sponsored health care once you retire. Any benefits you receive could reduce your out-of-pocket costs and, thus, the amount you need to save for medical expenses.

In addition, retirement health care plan accounts like a Retiree Health Savings Plan may be available through your employer and can help provide a tax-advantaged way to save for future health care expenses. We can help you determine whether this option is available to you and how it may fit your overall retirement objectives. 

For most retirees, Medicare will form the backbone of their health care plan. Medicare has gone through some significant changes due to the Affordable Care Act (ACA), and with a new presidential administration, there’s no way to predict how it may change in the future. We can help you stay abreast of details like eligibility, coverage, deductibles, and benefits.

It is also important to think about how you will pay for services to help you remain independent if you need help with daily living. According to a 2018 Genworth study, having an in-home health aide for 44 hours each week costs an average of $50,336 per year, and the national average annual cost of a private room in a nursing home topped $100,375.(3) Generally, Medicare and employer-sponsored insurance do not cover long-term care. We can help you consider your current health, family medical history, and other factors, and help you evaluate your options for funding your long-term-care needs.


  1. “Healthcare, Annuities, and Retirement: Introducing healthcare costs into financial planning conversations can increase savings and build retirement security.” HealthView Services. [Accessed March 26, 2019]
  2. “Trends in Health Savings Account Balances, Contributions, Distributions, and Investments, 2011‒2017: Estimates From the EBRI HSA Database.” Employee Benefit Research Institute. [Accessed March 26, 2019]
  3. “Genworth 2018 Cost of Care Study.” Genworth. [Accessed March 26, 2019]