The annual healthcare costs for a healthy retired couple is $11,400 a year, which most Americans aren’t prepared for, finds research from RBC Wealth Management.
Their “Taking Care of Health Care in Retirement” report finds most Americans expect to spend a modest amount of their retirement funds on out-of-pocket healthcare costs and 80% of people say they are worried about their ability to fund healthcare expenses in retirement. Despite their concerns, only half of respondents said they have factored healthcare expenses into their financial plans for retirement.
Consider this, even with Medicare coverage, experts say by age 75, healthcare expenses will make up 15 percent of your overall spending, which nearly doubles what you spent during your working life.
The study says there are three steps you can take to protect your retirement when it comes to underestimated healthcare costs -- Talk to a financial advisor about including healthcare expenses into your financial plan; consider including healthcare costs as a separate category in your plan, with a inflation rate of at least 5 percent; and, monitor your plan, reviewing it at least annually.