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Prepared for Higher Healthcare Costs in Retirement? - Motley Fool

Retirement planning usually focuses a lot on maximizing monthly income and that, of course, is totally appropriate. Logically, the more income we have in retirement, they more comfortable we’ll generally be. But part of that whole retirement planning exercise is to also estimate what our expenses will be in retirement, and make sure that our retirement income is sufficient to offset the expenses we have in our golden years. Want to know the one retirement expense that is nearly always underestimated? Well, that is the cost of healthcare in retirement. True, retirement means no more commuting costs, and may also mean less work clothing expense, but healthcare costs have been consistently increasing at a higher rate than inflation. And that means you’re likely going to spend more on healthcare in your retirement than you realize. Case in point: the 2024 monthly premium for Medicare Part B increased nearly 10%, while the Social Security cost of living adjustment was a mere 3.2%. Consider too, that Medicare doesn’t cover 100% of your healthcare costs so you’ll likely need to pay for supplemental insurance coverage. And what about long term care? Medicare doesn’t cover that, so if you need it you’ll be looking at significant out-of-pocket costs (unless your have separate, and costly, long term care insurance). You get the point – your healthcare costs in retirement will likely be much more than you’ve allowed for in your retirement plan, as discussed in this Motley Fool article by Maurie Backman.

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