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The rising cost of health care in the United States has become one of the primary risks to a financially-secure retirement. With health care costs expected to continue increasing faster than inflation, the time to plan for your future health care needs is now…before you retire.

Your ability to enjoy a financially-secure retirement can be enhanced by planning for future needs such as:

Long-Term Care Services: Are you familiar with the variety of long-term care services available? If it becomes necessary, what type of long-term care services would you prefer? How will you pay for any needed long-term care services?

Advance Directives: Have you communicated your medical care wishes in the event you suffer a catastrophic medical event? Have you named someone else, a spouse or other family member, to make medical decisions for you in the event you are incapacitated?

Paying for Health Care in Retirement: Do you know what your out-of-pocket health care costs might be after you retire? Are you aware that Medicare, while it covers many health care costs, has significant limitations? Are you familiar with the various types of insurance that can help pay health and long-term care costs not covered by Medicare?

Did You Know…

  • In 2012, men reaching age 65 had an average additional life expectancy of 17.8 years, while women reaching age 65 could expect to live an additional 20.4 years on average. (Source: A Profile of Older Americans: 2012, U.S. Department of Health and Human Services, April 2013)
  • While estimates vary, a couple retiring at age 65 without private health insurance from a former employer can expect to pay significant out-of-pocket health care costs during their retirement years. Fidelity Investments, for example, estimates that a 65-year-old couple who retied in 2013 needs about $220,000 to cover medical expenses throughout retirement, a 38% increase from the $160,000 first estimated for those retiring at age 65 in 2002. This estimate does not include costs of dental care, long-term care or over-the-counter medicines. (Source: 2013 Retiree Health Care Costs Estimate, Fidelity Investments)
  • About one-third of individuals turning 65 in 2010 will need at least three months of nursing home care, 24% more than a year, and 9% more than five years. (Source: What Is the Distribution of Lifetime Health Care Costs from Age 65?, Center for Retirement Research at Boston College, March 2010)
  • The national median daily rate in 2013 for a private room in a nursing home was $230, an increase of 3.6% from 2012. (Source: Genworth 2013 Cost of Care Survey, March 2013)
  • The average length of a nursing home stay is 835 days. (Source: CDC Vital and Health Statistics, Series 13, No. 167, June 2009)
  • At a median daily rate of $230, an average nursing home stay of 835 days currently costs over $192,000.

Tim Barton, ChFC

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