Retirement & the Rising Cost of Healthcare

(5/17/2012) The biggest challenge in funding retirement today may very well be covering healthcare expenses. With healthcare costs rising two to four times the rate of inflation, without a clear plan, this expense will absorb a growing portion of one's retirement portfolio. Over 90% of working Americans say they do not know how much they should allocate for healthcare expenses in retirement and only 40% even included it as a part of their retirement budget. For a couple in retirement, it is estimated that healthcare expenses could absorb 35% of their after tax income by the year 2030. Less than 10% of workers correctly estimated that their healthcare costs in retirement would fall within the range of $200,000 or more and this figure does not include both long term care and nursing home care. Many retirees wrongly assume that Medicare will cover most of their medical expenses while in fact Medicare only covers a portion of one's medical bills. Medicare also fails to cover dental, optical and hearing related expenses. It is estimated that someone with only average drug or medication related- expenses as a senior, will need to save $135,000-$155,000 to cover these expenses. As Medicare continues to consume an ever higher percentage of our Nation's gross domestic product or GDP, the Medicare Trustees predict this will reach an unsustainable level and could force dramatic changes to the program.

Planning as early as possible is critical to meeting this escalating retirement expense. Saving for medical expenses in retirement should be an integral part of a retiree's portfolio and must be considered one of the major costs in retirement. Of course one can begin by offsetting future medical expenses by living a healthy lifestyle today. Diet and exercise are critical to avoiding the high cost of any potential medications down the line. Secondly, the time to consider long-term care insurance is well in advance of retirement, the sooner one becomes a policy holder, the lower the premiums. Also consider a disability insurance policy in case of illness or injury so that a percentage of income will be covered. Almost 10% of workers have had the need to draw on their retirement savings to replace income when they were ill or injured and in most cases this money is rarely refunded back into the retirement portfolio.

Nancy Osborne,

Nancy Osborne has had experience in the mortgage business for over 20 years and is a founder of both ERATE, where she is currently the COO and Progressive Capital Funding, where she served as President. She has held real estate licenses in several states and has received both the national Certified Mortgage Consultant and Certified Residential Mortgage Specialist designations. Ms. Osborne is also a primary contributing writer and content developer for ERATE.

"I am addicted to Bloomberg TV" says Nancy.

Other related articles:

Obamacare Overview for Consumer's & Employer's

Obamacare & the Uninsured

Health Insurance: Filing a Claim

Health Insurance: Riders to Expand, Limit, or Exclude Coverage

Health Insurance: How Are Rates Determined?

Health Insurance: Types and Definitions

Life Insurance: Providing for Long-Term Care

Health Insurance Basics

Tips on Buying Long-Term Care Insurance

Healthcare Costs: The New Obstacle to Retirement



Fannie Mae & Jumbo Mortgage Rates

Just One Click! = Current Rate Chart

Pennsylvania Mortgage Rates Current Mortgage Rates - Hawaii Current Mortgage Rates - Alaska West Virginia Mortgage Rates Virginia Mortgage Rates District of Columbia Mortgage Rates Maryland Mortgage Rates Delaware Mortgage Rates New Jersey Mortgage Rates Connecticut Mortgage Rates Rhode Island Mortgage Rates Massachusetts Mortgage Rates New Hampshire Mortgage Rates Vermont Mortgage Rates New Hampshire Mortgage Rates Maine Current Mortgage Rates Vermont Mortgage Rates Current Mortgage Rates - New York Current Mortgage Rates - Michigan Current Interest Rates - Wisconsin Current Mortgage Rates - MINNESOTA Ohio Mortgage Rates Current Mortgage Rates - Kentucky Current Mortgage Rates - Indiana Illinois - Current Mortgage Rates Current Mortgage Rates - Iowa Missouri Mortgage Rates Current Mortgage Rates - North Carolina South Carolina Mortgage Rates Current Mortgage Rates - Florida Current Mortgage Rates - Georgia Current Mortgage Rates - Tennessee Current Mortgage Rates - Alabama Current Mortgage Rates - Mississippi Current Mortgage Rates - Louisiana Current Mortgage Rates - Arkansas Current Mortgage Rates - Oklahoma Current Mortgage Rates - TEXAS Current Mortgage Rates - New Mexico Current Mortgage Rates - Arizona Current Mortgage Rates - Kansas Current Mortgage Rates - Nebraska Current Mortgage Rates - Colorado Current Mortgage Rates - Wyoming South Dakota Mortgage Rates Current Mortgage Rates - North Dakota Current Rates - Montana Idaho Current Rates Washington Mortgage Rates Current Mortgage Rates - Oregon Current Mortgage Rates - Utah Current Mortgage Rates - Nevada Current Mortgage Rates - California

Start by selecting your state

Get the Updated and Improved Mortgage Rates App from

ERATE App - Current Mortgage Rates and Credit Cards
FREE Mortgage Rate Widgets
Your State's Rates or National Rates
Get this Widget for any State you want