Healthcare costs in retirement can catch even the most financially savvy individuals off guard. According to Fidelity’s 2024 estimate, the average 65-year-old needs about $165,000 in after-tax savings just to cover healthcare expenses in retirement — up nearly 5% from 2023.
Factors Driving Healthcare Costs
- Healthcare inflation consistently outpaces general inflation
- Longer lifespans mean costs accumulate over more years
- Advanced treatments carry higher price tags
- Growing demand from an aging Baby Boomer population
Options If You Retire Before 65
You can claim Social Security at 62, but Medicare doesn’t start until 65. The four main options to bridge the gap are: COBRA coverage, a spouse’s employer plan, ACA marketplace coverage, or a short-term health insurance plan.
80% of respondents in a recent study are concerned about covering healthcare costs in retirement. Planning ahead with a financial professional is the best way to prepare for this significant expense.
