You Get Sick
It’s no secret our health deteriorates as we get older. It’s also no secret health care is expensive. A report from the Employee Benefit Research Institute shows a 65-year-old man would need to save $72,000 to have a 50% chance of affording his health-care expenses in retirement (excluding long-term care) that aren’t covered by Medicare or private insurance. To have a 90% chance, the same man would need to save $127,000. The news is worse for a 65-year-old woman, who would need to save $93,000 and $143,000, respectively. Be sure you’re doing all you can to cut health-care costs in retirement by considering supplemental medigap and Medicare Advantage plans and reviewing your options annually.
Should you or a loved one need long-term care, costs skyrocket. According to Genworth Financial, the median cost for adult day health care in the U.S. is $1,560 a month; for a private room in a nursing home, it costs a median of $8,365 a month. Small wonder 73% of workers are concerned about their health in retirement, with 44% worried they’ll need long-term care due to declining health and 35% fearing cognitive decline, dementia and Alzheimer’s disease. Premiums can be steep, but look into getting long-term-care insurance to help cover those costs.