Retirement Risk: Long-Term Care
October 10, 2024
One of the biggest expenses most retirees encounter is healthcare. Even with a healthy lifestyle and great habits, getting older is almost certain to include a notable increase in costs associated with maintaining your health and quality of life. Medicare can help supplement costs no longer covered by an employer-sponsored health plan, but it is possible that it will not cover everything, leaving your savings to pay the difference.
The average 65-year-old will need around $165,0001 to cover healthcare costs throughout retirement. That number can increase drastically if long-term care also becomes necessary for you, your spouse, or both.
The unique (and possibly expensive) costs associated with long-term care are significant enough that it is wise to focus a specific portion of your retirement planning on these future needs.
Here are some things to consider2:
- 70%: Percentage of people turning age 65 who will develop a severe long-term-care need in their lifetimes.
- 15%: Percentage of people turning age 65 who will spend more than two years in a nursing home.
- $141,444: Estimated median annual nursing home cost, private room, 2030 (assuming 3% inflation rate).
- 18.2%: Percentage of long-term-care services and support that were provided through Medicare (acute and post-acute care following a health event), 2020.
Schedule your complimentary consultation and learn about options to provide for future health needs while staying focused on pursuing your retirement goals.