Do you know how much you should have saved for health care in retirement?
If you’re not sure, you are not alone. Many people have no idea what they will spend on medical expenses in retirement. It is important to do the math ahead of time because most people are financially unprepared. The majority of Americans have insufficient retirement savings… if any at all!
Each year, studies show that health care costs are rising. The most recent data suggest that the average retiree couple (age 65) will need $387,644 in today’s dollars for their health care expenses—and that doesn’t include long-term care!
Now, before you panic, we want to pause and remind you that even if you don’t have $387,644 ready to go in your bank account, there are things you can do to make your health care dollar go further. It all starts with picking the right health plan for your needs and budget.
Find Out How Much You’ll Need for Health Care
Your health care needs will change over the years. The plan you choose at retirement may not be a good fit down the road. According to the Social Security Administration, the average 65-year-old man today can expect to live until 84 and the average 65-year-old woman can expect to live until 86.5. This means over the course of your retirement, you may end up switching plans.
While it may not be realistic for each of us to have the recommended amount saved for retirement health care expenses, there are smart strategies you can use each year to manage your health care budget and enjoy a happy, healthy retirement.
If you want more information about how much savings you may need in general for retirement, check out our blog, which includes a free retirement planning checklist!