Don’t panic‼️

The following appeared in a USA Today article July 29, 2020.

For a senior couple retiring this year, healthcare could cost around $325,000 in retirement, when factoring in Medicare premiums and out-of-pocket costs on prescription drugs. Medical care alone can be enough to drain almost your whole nest egg if you aren’t prepared for it.

But here’s the thing. That’s over 30 years or so and varies with health care spending. Add up your food, property taxes, car expenses over thirty years and see what you get.

The reality is for most retirees the monthly cost per individual for Medicare, Medigap and Part D will be $144+$225+$35 for a total of about $404…increasing with inflation.

One comment

  1. So, I like the study that says you should anticipate spending $5,000 – $6,000 a year, per person, for medical premium and out of pocket costs. Expressed that way, it is almost budgetable.

    If you can’t afford that, and many people can’t, today’s lower cost option in many locations is Medicare Advantage (avoids the Medicare Supplement/Medigap premium, sometimes at no added cost). Then, you’re talking $250 – $350 a month, $3,000 – $4,000 a year, per person.

    If you can’t afford that, you probably aren’t prepared to retire … so, either save more or keep working. And, if you decide to save more, consider using the Health Savings Account option – America’s most valuable benefits tax preference (Medicare premiums qualify for tax free reimbursement using HSA monies).

    Finally, it is important to remember that a significant percentage of those who have to retire (loss of employment, ill, disabled, etc.) will ultimately qualify for Medicaid. In fact, my understanding is that one in five older Americans is dual eligible – where some or all of their Medicare premiums and out of pocket costs are paid by the Medicaid program.

    The larger issue was, is and will continue to be, the lack of funding – leaving our entitlement system in a financially unsustainable status, while, concurrently, the idiots in the beltway want to promise you more and more and more and more to get your vote while shifting the cost to younger Americans, those not yet old enough to vote and generations yet unborn. It is why we find ourselves today with funding challenges for the Medicare and OASDI trust funds, with a $26+ Trillion debt, and annual deficits of $1+Trillion for as far as the eye can see.


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