When you think about the things that cost you a lot of money during your working years, you might think of expenses like housing, transportation, and food. The cost of paying a mortgage and property taxes can be substantial, as can managing the expense of car payments and auto insurance.

But once you enter retirement, you may find that there's another expense that really starts to add up on you -- healthcare. Granted, healthcare costs can be significant even when you're younger. But as we age, medical issues tend to creep up. And if you think Medicare will pick up the tab for all of your costs, you're sorely mistaken.

In fact, many seniors -- particularly those who get most of their income from Social Security -- struggle to keep up with their healthcare expenses. If you want to avoid that fate, you'll need to get an accurate handle on what healthcare will cost and save up accordingly.

A person in scrubs sitting with a second person.

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You may be shocked at the bills you're in for

The amount of money you end up spending on medical care throughout retirement will depend on different factors. These include:

  • The state of your personal health
  • The coverage you choose (different Medicare plans offer varying levels of coverage)
  • The extent to which you're proactive about keeping yourself in good shape and being vigilant with preventive care

But according to a recent estimate by HealthView Services, the average 65-year-old couple retiring in 2021 should expect to spend a whopping $662,156 on healthcare throughout retirement. Meanwhile, the cost of healthcare is expected to rise at a rate of 5.9% a year. So that means that future retirees could see that $662,156 figure grow -- a lot.

Start saving now

There are far too many stories out there of seniors who are forced to skip medication doses or stay away from the doctor due to a lack of money. And you really don't want that to be you.

Now that you're aware of what healthcare might cost you, you can take steps to set more money aside for it while you're still working. One option in that regard is to simply pad your IRA or 401(k) plan as much as you can. Another option, if you're eligible, is to fund a health savings account (HSA).

To contribute funds to an HSA, you must be enrolled in a high-deductible health plan. If your insurance plan isn't HSA-compatible, boosting your IRA or 401(k) contributions may be your best bet. But if you can fund an HSA, it pays to not only do so, but pledge to leave your money alone and pay for near-term healthcare expenses out of pocket, even though you can take an HSA withdrawal whenever you want. That way, you can invest your HSA funds and grow your plan balance into a larger sum over time.

It's also worth noting that HSAs are loaded with tax benefits. Not only do contributions go in tax-free, but investment gains in these accounts are tax-free as well. Withdrawals, too, are tax-free -- but only if used for qualified healthcare expenses.

The last thing you want is to end up miserable during retirement because your healthcare costs aren't manageable. And you definitely don't want to land in a situation where you have to compromise your health due to financial constraints. Reading up on medical costs and saving accordingly could spare you a world of stress later in life -- and help you stay your healthiest.