Week 15: How do I plan for healthcare expenses in retirement?

Retirement planning is often focused on saving for travel, hobbies, or simply covering day-to-day living expenses. But there’s one major cost that can sneak up fast if you’re not prepared: healthcare.

According to recent studies, a healthy 65-year-old couple retiring today may need over $300,000 to cover healthcare expenses throughout retirement—and that's before factoring in long-term care.

So how do you plan for it without feeling overwhelmed? Here's a simple roadmap:

Know What Medicare Covers—and What It Doesn’t
Medicare kicks in at age 65, but it doesn’t cover everything. You’ll still pay premiums, deductibles, and co-pays.

Plus, services like dental, vision, hearing aids, and long-term care typically aren't covered. It's smart to research Medicare Supplement (Medigap) or Medicare Advantage plans to fill some of those gaps.

Build a Healthcare-Specific Savings Strategy

If you’re still working, a Health Savings Account (HSA) is one of the best tools available. Contributions are tax-deductible, the money grows tax-free, and withdrawals for qualified medical expenses are also tax-free. Even better: there's no "use it or lose it" rule—an HSA can grow alongside your retirement accounts.

Estimate Costs and Factor Them into Your Retirement Budget

Don’t just assume Medicare will handle everything. Estimate what you might pay annually for premiums, out-of-pocket costs, and potential long-term care. (Tip: A good starting figure to plan for is $6,000–$10,000 per person per year.)

Consider Long-Term Care Insurance or Alternatives

Long-term care is one of the biggest wildcards in retirement. Buying insurance early (usually in your 50s or early 60s) can lock in lower rates. Or, some people use a dedicated investment account to self-fund future care needs.

Stay Healthy and Stay Insured

Your health now impacts your healthcare costs later. Regular checkups, good nutrition, exercise, and managing chronic conditions can make a huge financial difference over the years. And always, always keep some form of health insurance active—even during early retirement years.

Healthcare expenses are one of the biggest threats to a comfortable retirement, but with smart planning, you can stay ahead of it. The earlier you build healthcare costs into your retirement strategy, the more options—and peace of mind—you’ll have when you need it most.

Want a personalized withdrawal game plan? Let’s talk.