Healthcare costs are increasing for everyone, as you already know. Post-retirement healthcare costs are really going to be significant, making it essential to save for those costs.
Valerie RumboughThe Employee Benefit Research Institute, in a May 2008 study, estimated that a couple who retired in 2008 at age 65 would need $635,000 to cover Medigap premiums and prescriptions. A couple who retires in 2018 will need more than $1 million. A recent report in USA Today found an increase in the number of doctors limiting the number of Medicare patients they see. These things can be devastating to a couple not prepared financially.
What can you do? Some are looking at long-term care insurance, which can greatly alleviate the financial burden. Although this can be expensive, there are many choices in this area, allowing one to purchase an amount they can afford. Others are saving more through their retirement plans.
Whichever you choose, you need to be as prepared as possible, especially since we don’t really know what the future holds for Medicare.
Sadly, most Americans are not saving enough for these costs. Currently, fewer than 10 percent of American adults have any sort of long term care insurance.
Are you prepared? If not, there’s no better time than the present to begin. Remember the ant in Proverbs!
– Rumbough, CPA, CFP, is chief operations officer with the Baptist Foundation of South Carolina. Contact her at 800-723-7242. In accordance with IRS Circular 230, any U.S. federal tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.