Health Care Costs Must Be Factored into Retirement Plan
By Cathy Weatherford
Insured Retirement Institute (IRI)
National Retirement Planning Coalition Launch Effort to Promote Health Care Costs Awareness and Preparation WASHINGTON, D.C.— The National Retirement Planning Coalition (NRPC) and the Insured Retirement Institute (IRI) today announced that they will focus their consumer educational efforts on promoting understanding of health care costs in retirement – the latest topic of the coalition’s six-month national retirement planning campaign. Throughout the month of August, coalition partners will engage consumers to increase awareness of the need to factor health care costs into a retirement plan.
When planning for retirement income needs, it is essential to incorporate the costs of health care into the calculation. While many often plan to rely solely on Medicare, increasing medical expenses, including premiums and out-of-pocket costs, will have a significant effect on retirement savings.
“Health care is a universal need and given the high cost, it can quickly erode savings,” said Cathy Weatherford, President and CEO, Insured Retirement Institute. “Americans planning for retirement should consider how to best manage this risk. By working with a financial professional, consumers can develop a plan to finance health expenditures beyond those covered by Medicare, such as premiums, out-of-pocket medical expenses, and long-term care costs.”
Health care expenses can add up in retirement. IRI and Health View Services estimated the average cumulative health care expenses for a healthy 65-year-old man in 2011 was $370,000, and for a healthy 65-year-old woman, $417,000. Medicare will serve as the foundation of a retiree’s health plan, but other retirement income sources may be needed.
To help explain Medicare and more steps consumers can take to ensure a financially sound retirement, the coalition has released a new fact sheet on the costs of health care in retirement. The fact sheet has been FINRA-reviewed for client use and is available, along with the latest resources to help consumers and financial professionals focus on long-term financial goals, at www.retireonyourterms.org.