You likely understand the need for retirement planning in St Louis MO and have hopefully included your retirement planning in your overall estate plan. If you haven’t already started a retirement plan, it is never too early to do so, particularly in light of recent figures that highlight the estimated costs of healthcare for a retiree.
The rising cost of healthcare in the United States has been at the forefront of the political agenda for some time now. Everyone seems to have an opinion on how best to fix the problem yet no one can agree on a solution. What everyone does appear to agree on is that healthcare costs are a growing concern for everyone in America, particularly the elderly. Given recently released estimates on what healthcare will cost the average retiree it is clear that those concerns are justified.
The current life expectancy of an American man and woman is 82 and 85 years respectively. Assuming a couple in Missouri retires today at the age of 65 they will spend, on average, $220,000 on healthcare during their Golden Years according to a report by Fidelity Investments. About 33 percent of that will be spent on Supplemental Medicare premiums, 23 percent on put-of-pocket prescription medication costs and the remaining 44 percent on other out-of-pocket expenses.
While the $220,000 healthcare tab may startle you, it can, and likely will, be even worse. If our imaginary couple is only 55 today and will not retire for another ten years the costs jump to $358,000. Or what if our couple actually outlives the average life expectancy? If they are 65 today and live to 92 and 94 they can expect to pay $355,000 in healthcare costs. These figures assume that the couple is in relatively good health, neither individual is suffering from any chronic illnesses or diseases, and that neither needs long-term care. If any of those variables applies the costs skyrocket.
Medicaid Planning in St Louis MO
If they are both in the 90th percentile for prescription drug expenditures as a result of chronic illness or some other reason, they can plan on spending $360,000 throughout their retirement years. Finally, experts tell us that 70 percent of the people who reach age 65 will go on to need long-term care at some point. The average cost for a year in a long-term care facility is approximately $77,000 for a semi-private room. Medicare won’t cover long-term care so our couple may have to pay out of pocket. If just one of the pair spends two years in long-term care – less than the average stay – another $150,000 or more must be added to the overall costs or retirement. Careful Medicaid planning in St Louis MO may be the best way to plan for long-term costs.
If these number concern you, be sure to consult with your estate planning attorney to determine how you can plan for the high costs of healthcare during your retirement.