Retiree Medical Costs Are Expected to Moderate, but Still High

Cheryl Costa, a licensed monetary planner in Framingham, Mass., stated that the projections might sound scary however that it might assist to consider the estimates in annual or month-to-month prices, moderately than a lump sum. Over 20 years, Fidelity’s common estimate works out to about $656 a month — not out of line with what you might already be paying for well being care, she stated.

“Keep it in perspective,” she stated.

Carolyn McClanahan, a licensed monetary planner in Jacksonville, Fla., stated that there have been many variables in well being care prices, and that future modifications to Medicare guidelines had been unpredictable. So moderately than specializing in generic estimates to save lots of for retirement well being prices, she stated, folks ought to take into account their particular state of affairs, together with what they at present pay for well being care, their common well being standing, their household historical past and the way a lot well being care they use.

“What is your health care mind-set?” Ms. McClanahan stated. If you don’t go to the physician that usually and also you’re exercising and sustaining a wholesome weight, your out-of-pocket prices in retirement could also be decrease and you’ll finances accordingly, she stated.

Here are some questions and solutions about well being prices in retirement:

Are well being financial savings accounts helpful for retirement well being prices?

Health financial savings accounts, or H.S.A.s, supply useful tax benefits and may be an effective way to save lots of for retiree medical prices, monetary advisers say — when you qualify to contribute to 1. You should be enrolled in a high-deductible well being care plan, with a particular annual deductible (at the very least $1,500 for particular person protection in 2023).

Money is deposited pretax, grows tax free and isn’t taxed once you withdraw it, so long as you spend it on eligible bills. An particular person can contribute as much as $3,850 in 2023, plus an additional $1,000 for these over 55. (Once you enroll in Medicare, you may not contribute to an H.S.A., however you should utilize the funds to pay for well being and medical bills.)