It says that a couple retiring at age 65 will need $280,000 for their medical care (beyond what traditional Medicare covers) for the rest of their lives. Later, the assumption is that they live to 87 and 89, so 46 person years, or $6,086 per person per year ($12,172 for the couple per year while both are alive) on average (of course, costs are likely to start lower than that but eventually increase to more than that at older ages).
I.e. far short of $36,000 per year.
Yes, that is far less than $36,000 per year. But even the $12,000 per year for a couple is more than many people anticipate.
that article ALSO said that the $36,000 INCLUDED the cost of long term care"
Notably, the $280,000 estimate excludes the cost of long-term care, such as home health aides or assisted living"
, which I guessing most people will not use so , yeah, the $36000/ per year is probably too high for most.
Another reason the $36000 figure may end up being too high is that Medicare has just announced an expansion of coverage of many services previously not available under Medicare Advantage programs.
"When Medicareâs open enrollment period begins on Oct. 15, the private insurers that underwrite Advantage plans â which already lure seniors with things traditional Medicare canât cover, like eyeglasses, hearing aids and gym memberships â will be free to add a long list of new benefits.
Among those the Centers for Medicare and Medicaid Services will now allow, if theyâre deemed health-related: Adult day care programs. Home aides to help with activities of daily living, like bathing and dressing. Palliative care at home for some patients. Home safety devices and modifications like grab bars and wheelchair ramps. Transportation to medical appointments.
âThis will potentially help people stay in their homes longer and not have to go to institutions,â Seema Verma, the C.M.S. administrator, said in an interview. âYou could provide a simple device or a home modification that could mean the world to a patient, but plans werenât allowed to do that in the past.â
I would not get fixated on any individual numbers; they are there just to provide a template. The whole point of the spreadsheet is to make you think about applicable categories and provide a fillable template.
Donât forget that the medical care numbers would include things often not covered by medicare - dental care and work which can get quite costly, hearing aids, eyeglasses, plus a lot of other items.
@doschicos
see the link I just posted #13702> Medicare Advantage programs will now BE allowed to cover those very items, where as before they werenât allowed to cover them.
Iâll believe it when I see it. Right now, the article reads âwill be allowedâ. In the meantime, one implant can cost $6-10K.
When I commented on the prior page that $36K did not sound out of line for premiums & OOP costs today, I mean for those who are not yet Medicare-eligible.
My mother has the Cadillac of retiree survivor medical insurance ($500 RX deductible & $500 Medical deductible, then everything paid at 100%), plus amazing dental insurance, but she still manages to spend $6000+/year, excluding the money paid for Medicare Part B. Eyeglasses, hearing aids, LTC insurance premium. It all adds upâŠ
Oh, I just see that @doschicos listed the same items above, so I will confirm, having prepared my motherâs taxes for a few years.
To me, including known expense categories like insurance and taxes for all things you currently (and/or in the future) pay for, would be a better way to keep a spreadsheet that reflects money coming in and going out. I find it harder to figure out things if I leave out categories or lump too many things together and then whoops, where was I too high or low so that this number is so out of whack from what was projected.
Customizing a spreadsheet/template is a good thing to get a handle on where funds are coming from and what theyâre being spent on. Taxes CAN change in retirementâfor some of us, states donât tax pensions while they tax regular earned income. Our state tax bill really dropped post-retirement. YMMV.
Ok, federal, sales, and property tax⊠they all can be easily accounted for. I just donât understand why someone who is not self employed needs to worry about having taxes as a separate line item. Unlike medical expenses and some other categories, taxes are very predictable (and even tax increases donât happen overnight, so one always knows whatâs coming). I never look at my paycheck in terms of pretax money; it is whatâs get deposited in the bank matters, and that excludes my 401(k) contributions as well. For most folks who have a mortgage, their monthly payment includes property taxes and insurance. Car excise tax is car expenses⊠just divide the tab by 12. Easy peasy.
My financial advisor friend has clients record all spending etc. for 2 months before filling out a similar spreadsheet.
When we met with a FA (not friend), our retirement spending âanswersâ were reviewed for consistency with current spending. This knowing that as time goes by weâll spend in slightly different ways.
We will file for SS between full retirement age and 70 - thought being that the higher $$ benefit will cover the increase in medical, be it medigap or deductibles. Our retiree medical runs til we are eligible for Medicare. It is far less that what the post-67 insurance costs will be.
Folks who currently have a mortgage with other things like insurance and property taxes included in the payment need to remember that those things will continue long after any mortgages are finally paid up.
In fact, some of us have multiple insurances: homeowners, umbrella, hurricane, flood. Leaving one or more out and not specifically listed on a spreadsheet would make the items harder to ID.
Similarly with income tax. In states that may tax any pension and/or SS differently (or not at all) pre and post retirement income taxes can be quite different. Breaking it out allows one to ID and plan for the difference.
Lumping little things I can see, but when the budget item may be $1000 or more/year or $10,000+ it can really make spreadsheet less useful as a predictive tool.
I donât break out sales tax as it is baked into the cost of items and wonât change from pre to post retirement.
Some stateshgave specific real estate tax breaks for elders in their own homes that can be considered in calculations as well.
My point is that even folks who pay P&I now know precisely what their T&I amounts are. They are listed as line items on their mortgage statement. If someone believes these would also go away with the mortgage payoff, no spreadsheet would help to fix their head. 
Thanks for that article, @BunsenBurner. I was thinking my medical expenses were much higher, but then realized two things. First, as a partially self-employed person (complex structure), I was including not just the 20% of my insurance premiums but the 80% that is often paid by employers. And, all of my medical expenses are paid out of pre-tax rather than post-tax $$. My travel budget is no doubt way higher and Iâd replace the horseback riding with cycling and hiking. After 10-15 years, we retired our old bikes and bought ourselves new bikes â probably $3K each. And, RE is probably higher in the years we spend the winters outside of New England.
I will turn 65 next year and can go on Medicare â which should decrease my cost. But, if I do, what happens to ShawWifeâs coverage? She is a few years younger and is now on my policy (and it is paid pre-tax). Can my company still pay for her coverage? How have other people handled the transition?
One interesting thing. ShawWife has always been a talented and productive artist (around 30 one person shows and over 100 group shows), but definitely slowed down in the years with kids at home. She has always been conscious of being cash flow positive, so in almost all years, she doesnât contribute negative cash flow. But, now her career seems to be flourishing. She has had a couple of shows in a high-end NY gallery in the last few years and is now having one in the spring at a high-end London gallery. They want to charge higher prices and, if they sell (which is more uncertain than in earlier years in which her shows sold out), she will actual earn modestly meaningful amounts. I have never doubted on art producing income but there are occasional surprises. .
I read an article the other day about the 5 most and least expensive places to retire in the US. They were pretty much based on median home cost. I was shocked to realize that the median home price in the most expensive place is less than the current value of the home I live in now, which is in icky NY and not lovely sunny no snow southern California.
For some reason, this made me feel better about retirement because I really want to live in a lower cost place, sell my house and buy something smaller and cheaper and have the difference to help supplement my pensions, SS and 401k/IRA monies.
H is Medicare eligible in just under 3 years while I have 3 years after that. He is on my health insurance and can stay on it till I retire. I am not sure when H should file for SS. He has this obsession about it because his dad died literally days before he was supposed to get his first check when he turned 65. However, his earnings record is far spottier than mine and he will probably collect more on my record, which he canât do until I am old enough.
I am starting to envision retirement. On my next birthday, I will begin what I hope will be my final 5 year plan of my work life. The goal is to get all kids settled or at least out of the house, sell at least one house, maybe two, reduce the number of cars I insure, ditto cell phones and the like. My other goal is to live off some of the income from house sales so that I can finally max out my 401k for my last years of work; debating if I should do some Rothâs now but I will not be converting anything.
Tangible things I am doing now is eating more healthily and trying to get to the gym.
Show this to your kiddos.
https://www.seattletimes.com/business/investors-regret-frivolous-spending-and-not-adding-to-savings/
Itâs interesting to see various spreadsheet. Iâll stick to tracking âmonthly outflowâ from credit union statement (cash + withdrawals + VISA + checks). I 've been doing it for about 7 year each time I balance the checkbook. I omit things like college and wedding that wonât be part of retirement. If we want more granularity by category, we refer to the year end Visa breakdown.
In retirement, ideally weâll want our post-tax income to cover todayâs outflow (with adjustments depending on whether we have to cover our own pre-SS medical insurance etc). This has been a good method for us. If you use the itemize method itâs really hard to remember to note everything.
I have a nursing coworker who plans to start drawing SS, cut her work hours so not eligible for insurance, and will have some time w/o insurance before she is 65. The FT job is literally driving her mentally ragged. And she is expecting a grandchild soon (from her DD/SIL; she is close to her DD) who will be nearby. Unfortunately had to divorce her H due to family dysfunction with her ex-H spoiling the son to the point where he never worked an honest day in his life (he just got out of prison for meth mfring) - and she got out of the marriage w/o much. Too bad as the ex-H died of a heart attack on Thanksgiving about a year after their divorce. She has to keep earnings below SS level. I suggested she look into catastrophic health insurance coverage and also maybe do some private duty work for cash. Her cousin is a MD who has catastrophic health insurance for himself and his W- maybe he can line her up with some private duty/cash basis work.
I know exactly what she is going through on not able to handle FT work much longer - this particular work situation sucks the life out of you. And nursing at the front lines is like that. DD1 is a nurse (BSN) at a VA Hospital - thankfully she has good pay and excellent benefits and 20 year full retirement. H says the pay ceiling for nurses at the front lines is too low (he is an engineer). However supply and demand in many areas will drive salaries up - as much as they want to squeeze the life out of you with minimal staffing and extra tasks during the work shift.
When you have good nursing care, thank them!
Regarding that *Wall Street Journal * spreadsheet with the example expenses including country club and horse riding costs, perhaps it is based on the target audience of the WSJ magazine, a wealthy lifestyle magazine they publish where they do articles about various people and list the expensive (usually $thousands per item) clothing that they are wearing.