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.

¹RAND Health. A Review of the U.S. Workplace Wellness Market. July 2012.
ACR#269982 12/17