More than you think.
According to a recently completed survey by Nationwide Financial, “baby boomers have significant misconceptions about their coverage under programs like Medicare and the Affordable Care Act.”
Over half say they don’t know what health care will cost in retirement.
Those who are willing to take a guess say the bill should run $1,000 to $5,000 per year.
Now quite, says Nationwide. That’s a “drastic underestimation.”
In reality, the average expense tops $11,000 per year, say retirement researchers, based on retiree expenses in 2012.
How can so many future retirees be so far off in their estimates?
Simple. Most pre-retirees think Medicare will cover “more than 60 percent of their healthcare costs.”
That estimate is far too high, say researchers. Plus, boomers think either Medicare or the Affordable Care Act will cover their long-term care expenses. (They won’t, say experts).
So what’s the best way to solve the healthcare problem in retirement?
Start prepared by saving 10 to 15% of your income each year for retirement.
Think about how you want to cover long-term care costs, which could be your biggest expense.
Consider using a supplemental insurance plan to cover those medical expenses that Medicare will not.
Make a cushion for unexpected expenses and test your “retire-ability” by rehearsing for retirement, starting to cut back on your spending at least a year before you stop working.