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Jan 10
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Healthcare Costs Consuming SSI Benefits

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Health Costs May Gobble Up Social Security Benefits

Healthcare for the average woman means they could spend an estimated 70 percent of her retirement check on health care costs, according to a recent study by the Nationwide Retirement Institute. The average man fares better, but still uses nearly half of his benefits to cover medical expenses.

Here’s how the Nationwide analysis reached its disturbing healthcare estimates: It assumed a woman with a life expectancy of 88 married a man who would live to 85 and they both claimed Social Security at 62, which is the earliest and most popular age to file for retirement benefits, regardless of gender. More than half of elderly married couples and nearly 75 percent single retirees depend on Social Security for the majority of their income in retirement. “Women disproportionately rely on Social Security in retirement,” said Nancy Altman, co-director of Social Security Works, which advocates for the expansion of the program. In fact, roughly two-thirds of Social Security beneficiaries age 85 and older are women. In the Nationwide’s bleak scenario, the man collects a monthly benefit of $1,543 and the woman collects $1,171 per month. (The average monthly benefit for a retired worker is $1,350, according to the Social Security Administration.)healthcare-costs

Nationwide projects hefty health costs for the hypothetical couple. The man would pay $214,278 in medical costs in retirement and the woman would pay more than $289,682, because of her longer lifespan. The forecast includes what the couple would have to spend on long-term care at a nursing home or in an assisted living center.

Source/more: CNBC.com

Want to protect your life savings from possible long term care costs?

We have advised hundreds of people on the steps they must take today to protect their assets from the possible catastrophic costs associated with long term care and nursing home care. Contact our office today for a no-cost consultation to discuss your estate planning options.

Matt Leonard

Sep 20
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Retiring? You will spend over $130K on Healthcare!

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Retiring Workers Will Need $130,000 Just to Cover Health Care, Study Finds

Retirement-Medical-Bills (1)Today’s 65-year-olds can expect to spend an average of $130,000 on health care after retiring, from premiums to co-payments to eyeglasses, according to new estimates. The average single 65-year-old woman can expect to need $135,000 to spend on health care in retirement, while a man will spend $125,000, according to estimates from Fidelity Investments. (The difference is because the woman is expected to live longer — an additional 22 years, vs. 20 years more for the man.) Every year, Fidelity estimates how much it will cost for today’s average 65-year-olds to cover health care expenses for the rest of their lives if they retire now. For a while, it looked as if health care costs were holding steady, but Fidelity this year says couples need to set aside a record $260,000 for Medicare premiums and all other out-of-pocket medical costs — up 6 percent from last year and 18 percent from 2014.

Prime culprits in accelerating health expenses are prescription drugs, especially high-priced specialty drugs, Fidelity says. And as the economy recovers, retirees are using more health care, driving up costs. Fidelity’s estimates, based on an analysis of Medicare’s claims database and trends in survey data, assume that retirees are eligible for Medicare and try to capture all the costs it doesn’t cover — including premiums, co-payments, and things Medicare doesn’t pay for, such as hearing and vision exams. But the estimates are only averages, and people’s costs can vary widely, according to where they live and how healthy they are.

What are the major expenses for retiring that I must plan for?

As retirement approaches, your life’s expenses don’t go away! They remain and now they must be paid on a fixed income. However, the big bills that I get called about are those possibly catastrophic costs associated with paying for the healthcare of a loved one who must reside inside a medical institution/rehabilitation center/nursing home. Family members are shocked with the reality that their existing health insurance will not cover this expense and that couples are left to finance these expenses out of their life savings.

As noted above, the cost for Medicare insurance is projected to cost a person over $130,000 over the remainder of their lifetime. What if you were to learn that you needed to pay that amount PER YEAR to care for a person in a nursing facility. That would certainly change the landscape of everyone’s financial future.

At Rhode Island Medicaid Planning, we discuss the Medicaid program, the program that if your assets and income are within certain limits will pay for the costs of nursing facilities. We discuss the rules and regulations and allow you to make a decision that works best for you and your loved ones.

Source/more: Bloomberg

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