And costs are becoming more onerous; they are up 2% on 2017 levels and up an incredible 75% on those recorded in 2002.* Such a significant rise goes to show that investors should give themselves additional leeway when planning for medical costs in retirement; you can never be sure just how steeply costs will rise as they can be affected by government regulations and many economic factors, including inflation.
Expat retirement planners should take note that the figures above (from a survey of more than 1,000 individuals aged 50 to 64 who had retired within the previous three years) assume eligibility for medicare; ineligible retirees will need to save even more to ensure they are able to meet their likely costs.
It should be further noted that these estimated costs are just averages. Many people retire early – often because of medical issues affecting either themselves of their spouse; these parties may need to save even more to ensure that they are able to meet their medical bills throughout their sunset years.
Early retirees were asked how they meet the expenses of out-of-pocket premiums, co-pays and deductibles associated with insurance coverage; half said they used regular savings; one-quarter depended on Social Security income; and 15% on retirement savings. Disturbingly, only 14% utilised a health savings account (HSA).
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* https://www.businesswire.com/news/home/20180419005696/en/ accessed 02-08-19
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