Stressed about health care costs? You’re not alone

As retirement approaches, the challenge of managing health care expenses doesn’t fade away. In fact, it often intensifies. For example, according to ERBI: Some couples could need as much as $413,000 in savings (extreme case) to have a 90% chance of covering medical expenses in retirement¹. How will you pay for these expenses? Among non-retired adults, 2 in 5 expect to plan to use their retirement savings for out-of-pocket medical costs, the Nationwide Retirement Institute® survey revealed. Understanding your health care costs in retirement and preparing for them can help alleviate health care cost stress. Here are some ways to get started:

1. Understand Medicare and supplemental insurance: Medicare premiums may be automatically deducted from your Social Security check in retirement. While Medicare provides essential health care coverage, it doesn’t cover everything. Additionally, Medicare premiums may be one of your largest expenses in retirement, and the one you may pay the longest. Familiarize yourself with what’s included and consider supplemental health insurance to cover additional costs. Our survey found that 2 in 3 adults wish they had a better understanding of Medicare coverage. Researching information such as the average cost of supplemental health insurance for seniors can help you to better gauge your future expenses.
   
   
2. Estimate future costs: Nearly 3 in 4 adults surveyed said they fear their retirement health care costs will go out of control. Online tools can help you estimate how much you might need to pay for health care costs in retirement. Be sure to include factors such as expensive medications, long-term health insurance costs, and home health care costs. A financial professional can help you use tools like Nationwide’s health care costs estimator to get a sense for what your health care expenses may be in retirement.
   
   
3. Develop a strategy for managing chronic conditions: Many illnesses, such as diabetes, can develop later in life, requiring regular doctor visits and daily medication. The Nationwide Retirement Institute® found that over half adults don’t have a plan to pay for chronic conditions in retirement, but it’s important to account for these potential expenses.
   
   
4. Save strategically: Nearly 3 in 5 surveyed said they worry about outliving their money when they retire. People are living longer, and that’s putting a strain on their ability to afford health care expenses in retirement. Make the most of your retirement savings by setting aside specific funds for medical expenses in a health savings account (HSA), for example, or adjusting your savings strategy to account for future costs.
   
   
5. Seek professional guidance: An experienced financial professional can be invaluable in helping create a comprehensive plan that addresses both your current and future health care costs. They can help you navigate insurance options, estimate expenses, and integrate health care planning into your overall financial strategy. A majority of adults surveyed (83%) said managing health care costs should be part of personal financial planning.

A financial professional can help you prepare for uncertainties around retirement health care and boost your confidence in building financial security for the future. Specifically, an experienced financial professional can create a tailored approach to help you by:

• Providing guidance on how to manage and potentially pay off health care debt and deal with medical debt collection.
• Developing strategies to plan for long-term costs, such as ongoing medical expenses and chronic condition management.
• Optimizing your retirement savings plan to help ensure you can cover future health care expenses, and that these costs don’t impact your day-to-day finances.
• Explaining Medicare and other long-term health insurance costs, including out of pocket expenses and coverage.

Health care expenses are a significant source of stress for many Americans, both now and in retirement. By working with a financial professional who can help you develop a comprehensive plan to manage your health care costs, you can take proactive steps to prepare for a future you can look forward to.