In a recent survey, Merrill Lynch partnered with Age Wave to gain insight into retirement.
With 10,000 seniors turning 65 daily, it is important to prepare for retirement. The survey found three important findings:
81 percent of Americans say they don’t know how much they will need for retirement.
Their No. 1 ingredient for happiness is their health.
72 percent of people worry about serious health in their retirement.
The cost of retirement includes an understanding of the average Social Security payments and average lifespan which is different for men and women. As of December 2016 the average monthly Social Security payment for men is $1,524 and for women is $1,209. There will be multiple health care deductions from the monthly SS payment (Part B and Part D) plus recommended Medicare supplemental insurance to help defray the out of pocket expenses associated with traditional Medicare.
As retirement budgets are developed, seniors should use an average of $300 for these monthly premiums. This will significantly reduce the amount remaining for living expenses, entertainment and out of pocket/patient portion payments for all Medicare plans. (Example: A woman might have $1,209-$300 = $909 left for all budgeted expenses and unexpected healthcare costs.) With women living until 81 and men until 76, considerable attention needs to be made for current healthcare costs and potential deteriorating healthcare chronic conditions; all resulting in additional costs deducted from the Social Security monthly payment.
Additionally, an average of 19 percent of all Americans indicate they will work beyond 65. This is the highest since the 1960s. If a person turning 65 is still working, it is important to thoroughly assess their major medical coverage through their employer as it will be primary to Medicare. If you are retiring before turning 65, there will be no Medicare coverage. It is the biggest hidden cost – finding gap insurance, usually only available through the exchange with varying individual coverage rates.
Is health care complicated? The payment system is different for each insurance plan, Medicaid/per state and Traditional Medicare versus Managed Medicare/Medicare Advantage.
Learn more about all the areas of impact at the first 2018 Patient Financial Navigator Community Boot Camp: “Medicare 101, Social Security Benefits and Assistance for Seniors” 8:30 a.m.–12:30 p.m. Feb. 3 at the College of Southern Idaho Fine Arts building. There is no cost and no pre-registration is required.
Day Egusquiza is the president and founder of the Patient Financial Navigator Foundation.