Retirees spend a significant portion of their income on health care. According to MoneyTalksNews, U.S. households led by someone aged 65 or older spend an average of $7,540 annually on health care. This amounts to about 13% of their total yearly expenses ($57,818). This is the third-largest category that older Americans face, after housing and transportation. While the average healthcare spending for all U.S. households is $5,850 per year, healthcare expenses for retirees are expected to increase by over a third.
What are the Biggest Healthcare Expenses for Retirees?
The elderly face numerous extra expenses. While they may have good health insurance, insurance factors in their care needs and increases their premiums. Some of the major healthcare expenses for retirees include:
Health Insurance
Health insurance is the most substantial healthcare expense for retirees. On average, senior households spend $5,277 per year on insurance, which translates to around $440 monthly. This includes various types of insurance, such as traditional fee-for-service plans, HMOs, and supplemental Medicare plans.
Medical Services
Retirees also spend a significant amount on medical services. These include hospital stays, eye and dental care, lab tests, X-rays, and services from physicians and other health professionals. On average, households led by someone aged 65 or older spend $1,142 per year on medical services.
Prescription Drugs
This is another major expense for retirees. On average, senior households spend $843 per year on medications, including vitamins, prescription drugs, and nonprescription drugs.
Medical Supplies
Retirees also need to budget for medical supplies. This category includes items like dressings, bandages, first aid kits, syringes, thermometers, and medical appliances, such as braces, canes, eyeglasses and hearing aids. The elderly spend an average of $278 per year on these medical expenses.
Why Is Estate Planning Important for Retirees Facing High Medical Expenses?
The high medical costs retirees face makes estate planning even more essential. While most people think of estate planning as dealing with inheritance, it has an important role during retirement. An effective estate plan can help manage and mitigate growing healthcare costs, ensuring that retirees have the resources they need to maintain their health and quality of life.
How Can an Estate Planning Attorney Help?
An estate planning attorney helps navigate the complexities of planning for healthcare and long-term care expenses. They assist in setting up various legal tools and coverage options, such as:
- Living Wills and Health Care Proxies: These documents specify your wishes regarding medical treatment and appoint someone to make health care decisions on your behalf if you cannot do so.
- Long-Term Care Insurance: An attorney can advise you on purchasing long-term care insurance to cover the costs of extended care services.
- Trusts: Setting up a trust can protect your assets. They’re a guardrail against fraud, scams and elder abuse.
Don't Leave it Up to Chance
Don't let unexpected healthcare costs jeopardize your financial future. Contact our estate planning law firm today to schedule a consultation. Our experienced attorneys can help you create a plan to protect you and your loved ones. Start planning now to secure your peace of mind and financial stability in retirement.
Key Takeaways
- Significant Healthcare Expenses for Retirees: They spend an average of $7,540 annually on health care, which accounts for 13% of all expenses and is their third largest expense.
- Major Medical Expenses: Health insurance, medical services, prescription drugs and medical supplies are significant healthcare costs for seniors.
- Importance of Estate Planning: Proper planning helps manage health care costs. This preserves your savings into your retirement, securing your long-term financial security.
- Long-Term Care: Planning for potential long-term care needs is crucial for retirees to avoid financial strain.
- Legal Assistance: An estate planning attorney can provide valuable guidance in setting up trusts, living wills and long-term care insurance.
Reference: MoneyTalksNews (Sept. 20,2023) “This Is How Much Retirees Really Spend on Health Care”
Photo by Keith Tanner on Unsplash.
