One of the scariest unknowns of retirement is how much you’ll be expected to pay for health care. Now, Health View Services has tried to clarify the picture by projecting how much a retired couple would pay for care from age 65 to 85.
Using an average 4.22 percent retirement health expenses inflation rate, Health View Services estimates you will pay the following annual amount for Medicare Parts B and D, supplemental Insurance, dental insurance and out-of-pocket costs:
- Age 65: $979 monthly, $11,752 annually
- Age 70: $1,266 monthly, $15,196 annually
- Age 75: $1,662 monthly, $19,942 annually
- Age 80: $2,115 monthly, $25,385 annually
- Age 85: $2,664 monthly, $31,966 annually
If the amounts look especially stiff in later years, it’s important to note that the projections are made in future dollars. But no matter how you calculate it, health costs are likely to be a major financial burden during retirement.
How to cut your health care costs
If those health care numbers are enough to make you sick, fear not: There are ways to trim these costs.
One method for cutting costs is to contribute in the years before you retire to a health savings account (HSA), which is available to those with a high-deductible health insurance plan. As we have pointed out in the past, HSAs offer one of the best tax breaks you’ll ever get, because:
- The money is deductible from your income in the year of the contribution.
- Gains on your contributions grow in the account tax-free.
- Withdrawals are tax-free when they are used to pay for qualified medical expenses.
HSA limits are set to rise in 2019 to $3,500 for individuals and $7,000 for families. Plus, you can make an additional $1,000 contribution if you are age 55 or older.
Another way to save is to use a website to purchase your prescription medications. We offer a roundup of these sites in “7 Websites That Will Slash Your Prescription Drug Costs.”
Dental costs can add to the burden of keeping your body in tip-top shape. If you are looking for a way to cut the cost of caring for your choppers, check out “5 Ways to Slash Dental Care Costs.”
How do you keep health care costs low? Share your tips in comments below or on our Facebook page.
Find the right financial adviser
Finding a financial adviser you can trust doesn't have to be hard. A great place to start is with SmartAsset's free financial adviser matching tool, which connects you with up to three qualified financial advisers in five minutes. Each adviser is vetted by SmartAsset and is legally required to act in your best interests.
If you're ready to be matched with local advisers who will help you reach your financial goals, get started now.