Retirees' Top Financial Concerns All Revolve Around This 1 Thing

Hint: It's something unavoidable for seniors.

Maurie Backman
Maurie Backman
Mar 11, 2019 at 6:18AM
Investment Planning

Though retirement is an exciting milestone to look forward to, the idea of it can be nerve-wracking. After all, there's a host of financial unknowns associated with retirement, and living on a fixed income leaves many seniors struggling to make ends meet. It's therefore encouraging to learn that 84% of seniors today think their retirement has been as good as expected, if not better, according to T. Rowe Price.

But that doesn't mean retirees don't harbor financial concerns. Many seniors have money-related worries on the brain, but according to T. Rowe Price, they all center on one key thing: healthcare.

Senior man blowing his nose

IMAGE SOURCE: GETTY IMAGES.

A valid concern

Though healthcare can be a burden for Americans of all ages, it can often constitute seniors' greatest expense in retirement, in part because as people age, medical issues tend to creep up. As such, the financial matters that worry today's retirees the most are:

  • Long-term care.
  • Health insurance premiums.
  • Out-of-pocket healthcare expenses.

These issues are largely unavoidable. An estimated 70% of seniors will need long-term care in their lifetime, and while there are ways to save money on Medicare premiums and out-of-pocket healthcare expenses, many seniors enter retirement not understanding what services Medicare will cover and what the program costs. The good news, however, is that working Americans can prepare for the inevitability that is healthcare in retirement so that it's less of an onus -- and source of financial stress -- in the future.

Prepare now, worry less later

While there's no avoiding healthcare expenses in retirement, you can ease the burden by boosting your savings so that you're better equipped to cover the costs you'll eventually face. Saving an additional $200 a month over a 30-year period, for example, will give your nest egg a $227,000 boost if your savings generate an average annual 7% return on investment during that period. That's a sum that could go a long way toward covering healthcare expenses.

Reading up on Medicare will also help you prepare for the expenses that lie ahead. For example, there are several key services that Medicare won't cover, like dental, vision, and hearing, so if you're planning to stick with original Medicare, you'll need a backup plan. On the other hand, Medicare Advantage, an alternative to Medicare, does typically cover these and other key services, so you'll need to compare the cost of an Advantage plan to original Medicare and see what makes the most sense.

Taking care of your health during your career will also help you keep your medical costs to a minimum during retirement. That means attending well visits on schedule and maintaining a healthy weight, among other things.

Another critical move to make during your working years? Secure long-term care insurance. Having that policy might save you thousands of dollars a year as a senior on things like nursing home care or assisted living. The best time to apply for long-term care insurance is usually your mid- to late 50s, though many seniors wait until their 60s to take that step. Either way, know that the younger you are, the greater your chances of not only getting approved for a long-term care policy, but also snagging a lifelong health-based discount on its premiums.

Retirement should be an exciting time in your life, but you can't gloss over the fact that it can be financially draining, especially when it comes to healthcare. The better job you do of saving, learning about Medicare, and securing long-term care insurance while you're still working, the less likely you'll be to fall victim to the financial stress so many seniors suffer from today.


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