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How to Help Your Clients Prepare for Health Care Costs in Retirement

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Not surprisingly, health care is one of the largest expenses for retirees after they leave the workforce. Budgeting for health care is a significant concern for clients as they make financial preparations for retirement, but this can be difficult and a bit unpredictable to plan for as costs continue to rise. According to Fidelity, the average couple that retired in 2022 at age 65 would need approximately $315,000 to cover health care expenses in retirement.

As a financial advisor, you can help your clients better prepare for future health expenses by sharing these insights into Medicare. 

Medicare premiums adjust based on income.

Some Medicare beneficiaries may be required to pay an additional premium for Part B (medical insurance) and Part D (prescription drug coverage) if their income is above a certain level. This is called IRMAA, or the Income-Related Monthly Adjustment Amount. In 2023, Part B premiums start at the standard monthly amount of $164.90 and increase depending on income. Medicare Part D premiums vary by plan but typically range from $7 to $80 a month. When an individual’s income is above a certain level, they will also pay an IRMAA surcharge in addition to their plan’s monthly premium.

Avoid overpaying for unexpected health care costs.

Not only should clients plan for healthcare utilization to increase with age, but they should also keep in mind that there’s no way to predict how their health care needs may change tomorrow. Without the right health coverage, a sudden diagnosis or unexpected hospital stay could quickly drain a retirement fund. When exploring their health plan options, it’s important your clients understand that Original Medicare (Parts A and B only) does not have a limit on out-of-pocket spending, which could leave them vulnerable to unexpected financial costs. Alternatively, Medicare Advantage (MA) plans include the safety net of an out-of-pocket maximum to cap annual costs, offering the potential to save thousands. Plus, many MA plans have no monthly premium (in addition to the standard Part B premium).

Let RetireMed provide your clients with Medicare advice that supports their financial goals.

As your clients plan for retirement, our advisors can help them avoid overspending on health care and ensure their retirement savings go further. We’ll provide personalized advice to help them find the right health plan based on their unique situation and budget. Call us or visit to learn more about how we can support you and your clients.

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