Healthcare Update

Healthcare costs often represent the largest retiree expense. Additionally, healthcare costs are increasing at a rate faster than the CPI (inflation). One 2016 study found that a healthy retiring couple would need $275,000 for out-of-pocket medical expenses over the course of their retirement. Creating awareness around healthcare costs is a critical goal.¹

A retiree needs to ask three questions:

  1. How much money do I need?
  2. How much money can I withdraw?
  3. How long will my money last?

On average, someone needs to hear a message seven times before they take action. That’s why constant communication is so important. Healthcare cost calculators can also play an important role.

Five steps participants can take are:

  1. Control what they can;
  2. Make a ballpark budget;
  3. Determine if they’ll receive retiree health insurance;
  4. Explore health savings options; and
  5. Set aside funds in a retirement account.

Participants pay more for healthcare under the following scenarios:

  1. If they retire early;
  2. As they age; and
  3. If they are single

 

  1. RAND Health. A Review of the U.S. Workplace Wellness Market

ACR#269982 12/17