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4 Health-Care Questions Every Boomer Needs to Ask


As health care costs rise and the Medicare debate rages, Americans are expressing concern about whether they’re saving enough money to fund health care in retirement. A June 2011 survey by Wells Fargo found that just one in three non-retired people had a “great deal of confidence” or “quite a lot of confidence” that they’d be able to fund their health care needs in retirement. And a May 2011 survey by Charles Schwab found that 37% of baby boomers say that unexpected expenses like health and medical costs are the most worrisome aspect of retirement.  What’s more, it’s not just that they can’t or aren’t saving enough, it’s often that they “don’t realize how much they need to have saved for health care,” says Colleen O’Brien, a vice president at Charles Schwab.

To help you figure out if you’ll have enough money to fund health care in retirement, O’Brien has outlined the four essential health-care questions you need to ask and gives advice on each:

1. How much money will I need each year for health care? A person who retires at 65 in relatively good health will need about $7,500 per year to cover out-of-pocket medical costs like Medicare deductibles and co-pays; if you’re not in such good health, that number might be more like $10,000 per year.

2. How long will I need these funds? Assume that you’ll live until about age 90, which means you’ll need to save anywhere from about $200,000 – $350,000 for out-of-pocket health-care expenses in retirement for a 30-year period. However, you’ll also need to take into account your family’s health history (is your mom alive and well at 95?) and your own lifestyle (do you exercise each day and eat healthy?) to determine whether you might live well past 90.

3. Will my savings and investments deliver enough of a return to pay for health care? Sit down with your financial adviser to talk about how to fund your out-of-pocket health care costs. The essential question: Will this nest egg generate enough income to provide you with between $7,500 and $10,000 per year for health care, while still providing you with the ability to fund your other needs like food and housing?  Ask your adviser to run a variety of scenarios for you using both conservative and more ambitious rates of return.

4. Should I buy a long-term care policy? The average assisted living facility charges $39,516 per year, the average nursing home $83,585 per year for a private room, according to the MetLife Mature Market Institute — and these costs often aren’t covered by Medicare. So it’s a good idea to look into buying a long-term care policy. Click here to determine if LTC insurance is right for you and to evaluate individual policies. Buy these policies in your 50s or early 60s to save money.


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    • While I was looking for a cheap health insurance my friend told me that there are sites, where people can compare prices from many providers.These sites are the only one way to save money on your insurance, because once you register many companies will make you different offers.The site he suggested me was:

      NationalHealthInsurance .i n f o

      I tried them and I saved more than 30%.Try it.Just register and get free quotes!

    • Thanks to the posters who provided information on supplemental medicare. That is very helpful.

    • The term “cost inflation” means a pure increase in prices charged for the same services. Some of that takes place. But most of the rise in health care spending reflects increased use of expensive inputs, in particular fancy equipment and medical specialists. There is no other way to put it, we have a couple of things against us (1) Baby Boomers are getting older (2) Inflation (3) The stress of living is making us sicker (4) The equipment to keep us alive cost a lot of money.

    • #1 on the list of “Health Care Questions Every Boomer Needs to Ask…”

      Why did I give up my Medicare in exchange for a coupon?

    • I know it’s easy to knock a Brit when we talk about our free healthcare, but the simple fact is we don’t worry about health care costs because it’s all taken care of – for everyone.
      Yes, it’s not perfect, but we simply don’t have the worry that our friends in the USA do. Cost isn’t a factor we ever consider. You get hit by a car; heart attack; cancer; diabetes – no worries: rich or poor.
      The republicans and the medical companies scare the living daylights out of US citizens with scare tactics not unlike the recently busted group of “scareware” criminals. It seems no different to me.
      The cost? We don’t see it. It’s part of the cost of living, like defense costs, and the same for all. Rich or poor, the ER is the same for everyone as private hospitals here (yes, r do have them!) don’t have ER.
      If you are wealthy and want to jump the queue, or have 5* hospital rooms, then you can pay for ever increasing private care to supplement the national system: Same consultants and doctors that I see, just maybe earlier for non life-threatening stuff.
      Oh, and there are no exclusions, restrictions or refusals with the NHS.

About Encore

  • Encore examines the changing nature of retirement, from new rules and guidelines for financial security to the shifting identities and priorities of today’s retirees. The blog also explores news that affects retirement, from the Wall Street Journal Digital Network and around the web. Lead bloggers are reporter Catey Hill and senior editor Jeremy Olshan. Other contributors include The Wall Street Journal’s retirement columnists Glenn Ruffenach and Anne Tergesen; the Director for the Center for Retirement Research at Boston College, Alicia Munnell; and the Director of Research for Pinnacle Advisory Group, Michael Kitces, CFP.