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Retirement Planning & Unexpected Healthcare Expenses

Oscar R. Mondragon

Posted on 06/14/2021

by Oscar R. Mondragon

Retirement Planning & Unexpected Healthcare Expenses

In the US, 15.4% of individuals over the age of 60 have no retirement plan in place. 30.9% of the entire US population didn’t think to create a retirement plan until recently, after the COVID-19 pandemic. However, even those who have a plan in place may not necessarily have their healthcare expenses covered.

The likelihood of having to go through a catastrophic healthcare shock increases as individuals grow old; especially after 80. These unexpected healthcare expenses can quickly drain savings and investments and create a hole in even the most reliable retirement plans.

Studies have showed that a couple over the age of 65 years require at least $295,000 to cover basic healthcare expenses after retirement. The figure becomes much higher if any major, unexpected issue arises. Individuals have the option of Medicare, but it doesn’t cover all of it.

For this very reason, it is important that individuals have a plan in place to cover these expenses if they arise. A prime solution to help individuals prepare for these uncertainties include Health Saving Account (HAS) funds and long-term care insurance.

Healthcare & Your Retirement Budget Plan

There are two major considerations that you’ll have to make when it comes to saving for healthcare after retirement:

The money that you will have to spend for expenses

The money that you are earning from investments, Social Security, pension, and other sources

According to a report by Board of Governors of the Federal Reserve System, while 15.4% of individuals over 60 years of age have no retirement plan in place, only 51% of the remaining 84.6% believe that their retirement savings are on track. 

Let’s consider some ways you can cover your medical expenses after retirement:


Basic Medicare plans (Parts A and B)  don’t cover it all. For instance, you will have to pay a good amount of money out of pocket if you’re in the hospital for a length of time. Even if you do go with a Medicare Supplement you will have to make room for deductibles, premiums, and medicine.

Health Savings Account (HSA)

Health Savings Accounts lets you set aside money on a pre-tax basis to pay for qualified medical expenses. This type of account lets you use untaxed dollars to pay for deductibles, copayments, coinsurance, and some other medical expenses. These plans are available to people in the U.S. who are enrolled in a high-deductible health plan.

Long-Term Care Insurance

Whether you believe you will be able to save enough in an HSA or not, you can also explore long-term care insurance options. Long-Term Care insurance is basically nursing home or assisted living insurance. It pays for the long-term care services many people need as they age or need help with daily tasks such as eating, getting dressed, bathing and more.

Of course, the costs of insurance premiums differ accordingly to age, health status, and desired benefit.

Perhaps the biggest threat to your retirement longevity is medical expenses. Medical expenses can rack up and drain your nest egg rapidly. In order to ensure your investments, family, and legacy remain secure from unexpected medical expenses during retirement, you should consult Centric to see all ends. We recommend you get in touch with us today to get a broad overview of what you can expect and what to do!

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