Older Americans spend over 13% of their total expenditures on health according to an Administration on Aging report. That’s more than twice the proportion spent by all consumers. That means that medical costs need to be part of any retiree’s financial plan.
Medical science has made tremendous advances in the last 50 years. Illnesses that would have carried us off in the past are now treated with drugs, surgery and/or prosthetic devices to keep us alive and active far longer. But that also means that we need to be aware of costs that are not covered by Medicare, “Medigap,” or private insurance programs. Because of our extended lifespans, the diseases of the aging such as Alzheimer’s are on the increase which has created in increased need for long term care. Even non-life-threatening issues such as hearing loss are now treated with devices costing thousands of dollars.
A good financial planner will take these issues into consideration when budgeting for retirement. They can help you determine whether you are adequately insured and protected against the possibility of catastrophic medical expenses.