Campbell Wealth Management - June 2018

Save for Rising Health Care Costs Now

E ven with Medicare, medical expenses can be costly. Many retirees worry that rising medical costs will eat away at their retirement savings. Even when offset by insurance, health care costs are above what the majority of people (working or retired) can pay, regardless of whether they have Medicare, employer-subsidized health insurance, or insurance through the Affordable Care Act. Fidelity estimated that couples who retired in 2017 at age 65 faced a cost of $275,000 for health care throughout their retirement, a 6 percent hike from 2016’s estimate of $260,000 and more than a 70 percent increase since Fidelity came out with its initial estimates of retiree health costs in 2002. These totals include Medicare premiums, copays and deductibles, and prescription drug costs, but not nursing homes or long-term care. Obviously, health care costs continue to rise every year. Over time, employers have offered ways to help workers offset costs through health savings accounts, which provide tax breaks on medical expenses. However, many retirees are not prepared for the high cost of medical care when they are no longer part of a company plan. Medicare only covers a percentage of your medical bills, which means retirees have to dip into savings to pay for medical costs.

While this certainly isn’t good news, there is a silver lining. If you take steps to increase your retirement plan contributions, you can compensate for those daunting health care

costs. This could mean cutting your spending or canceling trips now, but by ramping up your savings, you’ll be able to enjoy more of these things later in retirement. Given the rate at which health care costs are rising, you really have no choice but to face the problem head-on. Social Security won’t be able to provide enough income to cover medical expenses. The sooner you add to your portfolio, the better positioned you’ll be to save without worrying about dipping into your assets.

Upcoming Events

SUDOKU

TAXES IN RETIREMENT SEMINAR Connie Morella Library, Bethesda, MD Thursday, June 7 or Tuesday, June 12 at 6:30 PM

TAXES IN RETIREMENT SEMINAR Lee Center, Alexandria, VA Wednesday, June 27 or Thursday, June 28 at 6:30 PM

To register for any of the upcoming events, please email us at seminars@campbellwealth.com or call Carol at (571) 800-6373. Make sure to check out our website to see more upcoming events: CampbellWealth.com/educational-resources/upcoming-events/

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