As baby boomers continue to retire, the utilization of Medicare will see a steady rise over the next decade. This influx in demand will lead to an increase in healthcare costs for Delaware retirees and seniors across the country — accepting this fact is pertinent to your retirement planning efforts.
Lack of knowledge and preparation is all too common amongst retired Americans. A solid understanding of health care costs will put you ahead of many of your peers. From Medicare knowledge to the benefits of taking preventative measures, and creating a plan — we’re here to help you navigate the retirement process.
At Integrated Wealth Management, our goal is to share information that will empower you to make sound financial decisions today and for your future. Despite the often unsettling news, we still believe in retiring with confidence and peace of mind.
Medicare Demand and Current Costs
A recent USC article laid out the increasing demand on our healthcare system: “In 2000, the Medicare-eligible population in the United States numbered 35.1 million. By 2030, this number is expected to increase to 69.7 million.”
30 years can pass in a blink of an eye. Let’s face it, we remember Y2K like it was yesterday. Knowing Medicare is expected to see a 98% increase in eligible participants over this time frame puts the pressure on the program into perspective.
Remember Medicare Part A does not come with a premium; the standard Part B monthly premium is $148.50. Delaware high-income earners can expect higher premiums, the current max is $504.90 per month. Part D, prescription drug coverage, will add an estimated $12.30—$77.10 to your monthly premium; the range is income-based.
More and more Americans are choosing Medicare Advantage Plans (Medicare Part C) — which allows you to receive equal or greater coverage when compared to Original Medicare from a private insurance company. As you can imagine, the costs vary drastically when you factor in copayments, coinsurance, and deductibles.
Take Preventative Measures
While the above Medicare costs are an accurate guideline to monthly premiums, it will by no means be the extent of your healthcare costs. Deductibles, coinsurance, and long-term care need to be considered.
Long-term care is a topic of its own. We recently shared that studies show the average annual cost for long-term care hovers over $100k per year across the US. In Delaware, the average monthly cost is $12,699 for a private room in a long-term care facility. The same review suggests annual costs could increase by 30% over the next 10 years.
With an understanding of rising healthcare costs, we encourage you to prioritize your health in an effort to lower your lifetime expenses and improve your quality of life. Here are a few tips to get your mind into health mode:
Manage stress-induced illnesses.
Watch your weight and eat a balanced diet.
Find a hobby that keeps you active: Join a yoga studio, consider walking instead of riding during your next round of golf, take up tennis, and add a few minutes of stretching to your daily routine.
Stay focused at the wheel — accidents and injuries can change your plans in an instant.
Other preventative measures are also important. Yes, we’re talking about things like colonoscopies and mammograms. Getting regular physicals, routine blood work reviews, and other preventative care are smart ways to help maximize your retirement years.
Pre-Retirees Need to Have a Plan
The short answer to our original question, should baby boomers expect to see rising healthcare costs as they retire, is yes. And Delaware high-income earners need to take added steps when determining their Medicare plan costs to avoid surprise, as the standard plan costs are widely shared, but not accurate for this group.
Our wealth advisors have the tools and knowledge to help you determine your estimated retirement healthcare costs. While it’s never too early to start saving for retirement, we recommend pre-retirees start dialing in the numbers and implementing a plan about 10 years before their desired retirement date.
If this is you, schedule a consultation to learn how we can help you navigate the stages of retirement: