Why Everyone Should Plan for Healthcare Costs in Retirement

Because we all age, it is essential that everyone consider the impact of future healthcare costs on their finances.



As Americans, we are living longer. With increased longevity, comes the need for increased savings to maintain your quality of life throughout retirement. There are many things to prepare for in retirement and healthcare costs are often overlooked.

Medical costs, Medicare premiums, out-of-pocket premiums and prescription medications continue to increase every year. Covering the cost of care for an unexpected medical event or long-term illness not covered by private insurance or Medicare has been shown to cause Americans to deplete their assets, including retirement savings.

For most of us, staying healthy and independent as we age can have a positive impact on our well-being. How we age, and our future overall health and longevity is often, unpredictable. Careful planning can reduce some of the risks and cost associated with aging. Here are a few things to think about when thinking about what may come.

Chronic illness
Although we can control our diets and exercise throughout life, some hereditary and unforeseen illnesses can arise, especially later in life. Chronic illness such as heart disease, diabetes and cancer can require extended care and insurance may not cover all of the costs.

Several types of life insurance exist that offer critical illness riders and cash value policies that can give you access to money while you are living. There is also long-term care insurance that can provide benefits that typically aren’t covered by Medicare or Medigap. Studies have shown that as people age they prefer to stay in their homes as long as possible, even if they require assisted care. The idea of ‘aging in place’ is growing, however, it does require planning.

Aging in place
According to AARP, 82% of seniors would prefer to stay in their homes even if they begin to need day-to-day assistance, while only 9% expressed desire for a nursing care facility. Today there are a number of different options to a traditional nursing facility. Many opt for assisted living at home, a notion supported by Medicare and some state programs to reduce the overall cost of care. This includes providing in-home visiting nurses, home health aides and physical therapists when needed. Another issue to consider when aging in place is mobility.

Mobility at home
The changes that occur with aging can lead to challenges with a person’s ability to move physically around, or mobility. Mobility problems may include unsteadiness while walking, difficulty getting in and out of a chair, or falls. Reducing hazards in the home, making home modifications and staying active to increase mobility and strength can help prevent injuries such as falls, while extending your time at home.

If you own your home now, consider being proactive and think about how to prepare to meet your needs as you age. Here are a few ideas to age in place with confidence.

  • Consider adding brighter lights and night-lights
  • Remove slick flooring and add slip resistant rugs
  • Declutter high foot traffic areas
  • Add bathroom grab bars, elevated toilets, pedestal sinks and walk-in bathtubs
  • Widen doorways, lower mattresses and add handrails to the bed
  • Keep kitchen items within reach and at waist level
  • For people who live alone, consider technology such as health monitoring sensors, wearable personal emergency response buttons and voice activated home automation to lend a hand.

Your health is everything. Plan for the inevitable so you can be resilient, independent and strong - now and long into your future.