How Boomers Can Plan For Their Health-care Costs In Retirement


Health-care costs are often the big question mark hanging over boomers retirement savings. Its impossible to predict just how much health-care will cost as we age, but there are steps we can take to reduce our risks and protect our savings.

Fidelity Investments annual look at expenses for retirees shows a couple, both 65, retiring in 2013 would probably need $220,000 to cover health-care expenses if the husband lives to 82 and the wife 85, the average life expectancies.

“These numbers matter because health-care related costs will eat up a good portion of one’s savings in retirement, but it seems to be the cost that individuals have the least amount of awareness of,” said Brad Kimler, executive vice president of Fidelity Benefits Consulting, in a statement.

While Medicare provides some coverage for retirees, it doesnt cover everything. The financial impact of a long-term illness can drain retirement savings quickly. Even boomers in good health will have the added expenses of premiums, co pays, deductibles and prescription costs as they age. It is important for baby boomers to consider the impact of rising health care expenses on our savings and income.

Mark VandeVelde, certified financial planner at Wealth Partner at Hefty Wealth Partners in Auburn, Ind., offered the following tips for boomers to plan for health-care costs in retirement:

Boomer: What steps can retirees take to avoid underestimating health-care costs in retirement?

VandeVelde: Educate yourself! Talk to other people that are in later life stages and learn about their experiences and health-care costs. Its also a good idea to ask them what they expected and whether or not they felt prepared.

People that have experienced the things that you are likely to experience down the road hold a treasure chest of information. You just have to ask the right questions to open the chest. Do research online to learn about current industry trends and how they are going to affect you.

English: Spending on U.S. healthcare as a perc...

Work with your financial advisor and lean on their experience and expertise to build a plan around the “what-ifs”. If you have a formal financial plan, make sure that it encompasses all of the costs that you anticipate for health care as a separate item, not just lumped in with all other spending. This helps to keep the focus on this major issue

Boomer: What are some of the misconceptions baby boomers have concerning Medicare coverage. What does it cover and what is not covered?

VandeVelde: The most common misconceptions are that Medicare will cover all of your medical needs once you reach age 65 and that it will also cover a long-term stay in a nursing home. Neither of these are true. Medicare is just like your traditional health insurance coverage in that you still pay premiums, deductibles, and co-payments. It will cover the majority of the costs of major health events, but it will not cover it all. However, there are no-out-of pocket costs for most preventative services. When it comes to long-term care, Medicare will cover most medical needs, with deductibles and co-pays, but not any form of custodial care, whether in your home or a facility.

Another major, and dangerous, misconception is that you have no choices in the matter of health care once you reach age 65. Just like any other time in your life, you are a consumer of health care and you have choices! You can accept the Traditional Medicare coverage if it is best for you, but it is not your only option.

Boomer: Please explain the two types of Medicare: Traditional and Medicare Advantage

VandeVelde: Traditional Medicare is comprised of Part A and Part B for everyone, and then other options are available, such as Part D and Medigap policies, that can increase specific coverage, such as prescription drugs. Parts A and B are government programs, while Part D and Medigap policies are purchased through private companies.

Medicare Advantage policies contain the same benefits as Traditional Medicare, but are offered by private insurance companies that are approved by Medicare. Medicare Advantage policies tend to offer more coverage options than does Traditional Medicare. You have greater flexibility in choosing a plan that will fit your needs.

Once a year, you can elect whether or not you are accepting Traditional Medicare or you are choosing your own Medicare Advantage plan. Every year, in theory, you could switch between Traditional Medicare and Medicare Advantage based on what is best for you at the time, but you cant have both at the same time.

Boomer: What effects if any do you see the Affordable Care Act having on health-care planning for pre retirees and retirees?

VandeVelde: None at this time. Health care planning should continue to be based on todays environment. One of the scariest aspects of the Affordable Care Act is that there are still many unknowns about the complete impact on our health care system, our baby boomers, and our economy as a whole. I recommend that pre-retirees and retirees continue to plan based on what we know, not on speculation of what is to come. Even if there are certain aspects of the reform that we think we understand now, they are all subject to change.

Original Story Here

This story sponsored by private healthcare.


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  1. Reply

    Health Diet Tips To Keep Myself Skinny And Healthy? I am 115lbs and I am 13. I was wondering if anyone had any health tips to keep myself healthy.

    I was looking into this diet where I would start with eating protein and gradually work my way into eating my fruits and vegetables. Does anyone know what this diet is called?

    (Please, No comments with additude. Any other comments will be appreciated. Thanks so much!)
    Also, I don’t want to be on a diet plan (Such as Weight Watchers). Thanks!

      • HealthNut
      • July 6, 2013


  2. Reply

    How Can I Get Healthy? -Health Tips? This year, I made it a point to become healthy. I have lost some weight and got rid of some acne.

    I really want to be healthy, and make sure that I look healthy.

    Can you give me some all over health tips?
    Im a teen girl by the way.

      • HealthNut
      • July 6, 2013


      The best advice I can give you is exercise daily and eat well. Eat at least 5 portions of fruit or vegetables a day. Try to cut out as much sugar and snacks as you can manage. Drink plenty of water. Exercise for about 30 minutes a day, remember this does not have to be running a million miles and lifting 10 ton weights. Walking is an excellent form of exercise and is great because you can walk briskly around shops whilst looking at really cute outfits!

      I hope this helps!

  3. Reply

    Anyone Have Some Good Tips For A College Student Who Wants To Lose About 35 Pounds? Basically Im pretty lethargic due to the studying….I do a fair bit of walking and I dont eat fast food more than a coupla times a month, but I seem to keep gaining weight. Basically I need some health tips or some way of beginning to get rid of the buddha belly.

      • HealthNut
      • July 6, 2013

      As a fellow student, I understand your struggle. My butt feels constantly glued to a seat and I don’t have the time or attention for planning healthy meals. It’s tough but I manage to control my weight and even lose weight every now and then with some pretty easy tactics. Since you want to lose it, you’ll have to get serious. I would highly recommend cardio workouts. Depending on your fitness level and personal tastes you could try at home workouts like Tae Bo or you can hit the gym (in which case walking or jogging on the tredmill mixed with weights would be effective). Basically, make yourself workout even when you feel tired from studying or a long day. Next thing you know, you’ll look forward to the stress relief. Remember to watch what you eat and consider counting calories…you may be surprised how much you eat daily! Get sleep. Lack of sleep stresses the bod out and you may compensate with food. And you definitely will have less energy for workouts. GOOD LUCK!

  4. Reply

    I’m Trying To Loose Weight, What Are Some Health Tips? I’m making a modeling portfolio, and I know I need to be slimmer. What are some health tips, such as eating veggies, and colors to dress in the make you look slimmer? What is skinny for height 5’8″? I am Indian (India) & German and I have blue eyes.

      • HealthNut
      • July 6, 2013

      Unfortunately there are no easy ways to permanently lose weight and most people who lose weight regain it all.

      A vegetarian or vegan diet for the rest of your life might perhaps be a good option as very few vegetarians or vegans are overweight.

      If you want a life changing permanent weight loss you need to follow a maintenance diet for the rest of your life after you reach your target weight with one of the many diets you can choose from.

      You can see further details in a web search for “how to lose weight and keep it off”.

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