There are two major expenses which rise faster than normal inflation rates with great consistency – healthcare costs and college costs.

I suspect college costs will tend to slow their inflationary factor down to something more normalized, as more and more colleges embrace technology to deliver education and reduce their expenses.

Healthcare costs… I fear the opposite may be true! In fact, at this rate your Social Security check will barely cover your healthcare costs in retirement!

 

$321,000 in retirement healthcare costs?

Healthcare costs in retirement can be financially devastating if you don’t prepare.

According to the healthcare article here“For a 55-year-old couple retiring 10 years from now, their expected lifetime costs for Medicare and Medigap are projected at nearly $321,000. When dental, vision and hearing costs as well as co-pays and other out-of-pocket costs are included, their projected lifetime costs rise to more than $463,800.” If you haven’t added or properly assessed your potential healthcare costs in your retirement plan, you’re in for a rude awakening!

“HealthView Services’ Retirement Health Cost Index projects that total health care costs will consume 67% of lifetime Social Security bene5ts for a 66-year-old couple retiring at their full retirement age this year.” That’s a downright scary fact! You want that boat or that fancy trip to Europe? Think again!

Think that’s bad so far? Those estimates are for low income retirees. If your modified adjusted gross income is too high your medicare surcharges will be outrageous! For MAGI over 170K (married) or 85K (single) your medicare surcharges may rise another 35% to 200%!

We see this everyday, in fact every time we review our client retirement plans we always put a heavy focus on expected healthcare costs in retirement.

If you’re not calculating retirement healthcare costs appropriately, you could be headed for disaster! And if you’re on the borderline for medicare surcharges, you’d better be watching your investments and cash flows like a hawk to make sure you don’t cross that threshold.