Prepare for Onerous Health-Care Costs

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Ever wonder what your future will be like? Here at the Fool, we try to nudge people toward saving and investing as much as possible for their golden years. I've often warned about the particular danger of health-care costs in retirement -- they can consume a much bigger chunk of your savings than you'd planned. According to Fidelity Investments, for example, a couple, both aged 65, without health-care coverage from a previous employer, will need $225,000 to cover health-care costs in retirement.

As it turns out, the picture is even scarier than that. According to our friends at the Commonwealth Fund, some 79 million American adults are having problems with medical bills. That huge figure represents 41% of working-age Americans, up sharply from just 34% in 2005.

Here are some alarming statistics: Almost 9 million adults aged 64 or younger have lost their health insurance since 2000. Even the insured are still spending a lot on health care and insurance -- more than 5% to 10% of their income. And according to the report, more than 100 million U.S. adults had trouble paying medical bills, chose not to get treatment because of its cost, or had insufficient or nonexistent health insurance.

Plan for health-care pitfalls
To keep yourself and your finances hale and hearty, incorporate rising health-care costs into your budget and future plans. Build an emergency fund. Aim to stay healthy by exercising, eating healthful foods, and perhaps losing some weight. Keep health insurance in mind when you think about changing jobs or striking out on your own, entrepreneurially.

And when it comes to investments, remember that some companies stand to benefit from rising health-care costs. You might want to invest in health-care-oriented ETFs or mutual funds, such as the Schwab Health Care (FUND: SWHFX) fund, which sports a reasonable expense ratio of 0.82% and a market-trouncing average annual return of around 13% over the past five years. Its top holdings recently included Express Scripts (Nasdaq: ESRX), Baxter (NYSE: BAX), and Pfizer (NYSE: PFE).

In addition, directly investing in individual stocks like Johnson & Johnson (NYSE: JNJ), Medtronic (NYSE: MDT), and Cigna (NYSE: CI) that might stand to benefit from surging health-care costs can be a smart move, too.

Finally, learn more about the coming health-care crisis.