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One of the most often overlooked factors in retirement planning is healthcare costs. As you prepare for retirement, it’s crucial to consider not only your day-to-day expenses but also the potential financial impact of healthcare. From routine check-ups to unexpected medical emergencies, healthcare expenses can have a significant impact on your overall retirement budget. 

By factoring in these costs and planning accordingly, you can ensure that you are adequately prepared for any healthcare expenses that may arise during your retirement years.

Healthcare costs can vary dramatically, depending on the types of services you need and your location. In general, most retirees should plan for annual out-of-pocket healthcare expenses totaling between $5,000 to $10,000. 

Here are some of the most important reasons why you should consider healthcare costs when planning your retirement:

1. You Don’t Know What Healthcare Services You’ll Need 

It’s impossible to predict exactly which healthcare services you’ll need over the course of your retirement, but it’s important to plan for the potential costs. Common healthcare services that retirees use include doctor’s visits, prescription medications, vision and dental care, physical therapy, emergency room visits, and hospitalizations.

2. Healthcare Costs Rise Yearly 

Healthcare costs tend to increase year-over-year as technology advances and medical treatments become more sophisticated. It’s important to factor in potential cost increases when budgeting for your retirement.

3. Government Programs Often Only Cover a Portion of Costs 

Medicare is often touted as the solution for seniors’ healthcare costs, however it only covers around 60% of medical expenses on average. This means that you could be liable for 40% or more of your medical bills.

4. Long-Term Care Costs Can be Substantial 

If you or your partner need long-term care, the costs can add up quickly. An extended stay in a nursing home could cost more than $75,000 annually! It’s important to factor this into your retirement planning so that you’re not stuck with unexpected medical bills. 

5. Work with a Financial Advisor 

It’s important to communicate with a financial advisor when budgeting for your retirement to make sure that you’re accounting for healthcare costs—and all other expenses associated with retired life. A financial advisor can help you create a tailored plan that meets your specific needs and ensures you have the funds to cover any medical bills that might arise. 

Retirement planning is no small task, and it’s important to consider all factors—including healthcare costs. Doing so will give you confidence knowing that you’ll have the funds for treatments and medications when needed.

If you want to learn more about the best ways to prepare for and manage your healthcare costs in retirement, we can help.

At Independent Financial Services we have professionals that can guide investment strategies, tax-efficient savings options, and retirement income planning. 

Get in touch with us today to enjoy a comfortable and secure retirement experience! 

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. The information provided does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but there is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

Long Term Care Insurance Products may not be suitable for all investors. Surrender charges may apply for early withdrawals and, if made prior to age 59 ½, may be subject to a 10% federal tax penalty in addition to any gains being taxed as ordinary income. These policies have exclusions and/or limitations. The cost and availability of Long Term Care insurance depend on factors such as age, health, and the type and amount of insurance purchased. As with most financial decisions, there are expenses associated with the purchase of Long Term Care insurance. Guarantees are based on the claims paying ability of the insurance company. Please consult with a licensed financial professional when considering your insurance options.