Medical Expenses in Retirement
Jul. 26th, 2006 08:00 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
livingdebToday I came across an article discussing the ramifications of a study showing that "[i]f you were to retire today, you'd need about $295,000 just to pay for health-care costs for you and your spouse."
Medical expenses are the one part of my retirement financial planning that I haven't devoted much thought to. My company actually pays for insurance comparable to what we have now, and it currently pays the full premium for retirees. So my costs would be lower than the figures used for this estimate.
Except for the part where I'm not retiring for 8.5 years and I plan to have twelve more years in retirement than for the figure they used. And companies are dropping retiree insurance or making the retiree pay for more or all of it and/or increase co-pays and deductables and yearly maximums, etc. Not to mention that medicare cannot afford to continue in the same way it is now. So maybe it could be much, much more.
Still, should I really have to save up just as much for medical care as I do for everything else combined?
I'm hoping that by staying thin and in shape and driving carefully, I'll be able to keep my medical expenses lower than average. Except for the part about how I'm getting bigger, getting more out of shape, and letting other people drive me around everywhere (bus drivers, etc.), this is a good plan.
So it turns out I may be just as fluffy-headed about retirement planning as all those people who've just decided they'll never quit working. Which is a great plan so long as you are healthy enough to do so.
**
The study (the second link) discusses an interesting strategy for those who have HSA's. Those are Health Savings Accounts, for people who have high-deductible insurance. By high-deductible, they mean, I believe, over $1050 per year, as compared to the average deductible of $250. You contribute the money before taxes and then can spend it only on medical expenses. You can deposit more than you think you'll spend over the next year because you can roll over all the extra.
The strategy is to put money in an HSA, actually the maximum amount possible, but then don't use it for medical expenses even if you have some. This way you can keep the money growing tax-free until you really need it.
The study also has links to three sites where you can estimate how long you will live. I tried the first two, and they have rather different questions. At the end (of the first two, anyway), you get not only a number, but also some recommendations on how to improve your odds of living longer. Everyone agrees that I need to eat better. Less sugar, more vegetables. If vegetables were as yummy as cookies, or even banana bread, then sure. But even just contemplating a trade like that makes me feel deprived.
Medical expenses are the one part of my retirement financial planning that I haven't devoted much thought to. My company actually pays for insurance comparable to what we have now, and it currently pays the full premium for retirees. So my costs would be lower than the figures used for this estimate.
Except for the part where I'm not retiring for 8.5 years and I plan to have twelve more years in retirement than for the figure they used. And companies are dropping retiree insurance or making the retiree pay for more or all of it and/or increase co-pays and deductables and yearly maximums, etc. Not to mention that medicare cannot afford to continue in the same way it is now. So maybe it could be much, much more.
Still, should I really have to save up just as much for medical care as I do for everything else combined?
I'm hoping that by staying thin and in shape and driving carefully, I'll be able to keep my medical expenses lower than average. Except for the part about how I'm getting bigger, getting more out of shape, and letting other people drive me around everywhere (bus drivers, etc.), this is a good plan.
So it turns out I may be just as fluffy-headed about retirement planning as all those people who've just decided they'll never quit working. Which is a great plan so long as you are healthy enough to do so.
**
The study (the second link) discusses an interesting strategy for those who have HSA's. Those are Health Savings Accounts, for people who have high-deductible insurance. By high-deductible, they mean, I believe, over $1050 per year, as compared to the average deductible of $250. You contribute the money before taxes and then can spend it only on medical expenses. You can deposit more than you think you'll spend over the next year because you can roll over all the extra.
The strategy is to put money in an HSA, actually the maximum amount possible, but then don't use it for medical expenses even if you have some. This way you can keep the money growing tax-free until you really need it.
The study also has links to three sites where you can estimate how long you will live. I tried the first two, and they have rather different questions. At the end (of the first two, anyway), you get not only a number, but also some recommendations on how to improve your odds of living longer. Everyone agrees that I need to eat better. Less sugar, more vegetables. If vegetables were as yummy as cookies, or even banana bread, then sure. But even just contemplating a trade like that makes me feel deprived.
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no subject
on 2006-07-27 10:16 am (UTC)no subject
on 2006-07-28 04:15 am (UTC)no subject
on 2006-07-28 05:21 am (UTC)no subject
on 2006-07-29 03:25 am (UTC)I have seen some extremely old people in magazines who are in good shape, though, so it's possible, if unlikely.
HSA
on 2006-07-27 04:09 pm (UTC)But I definitely enjoy my HSA. I have a high-deductible health plan that uses one through work.
Tam