It’s no secret health care is one of the biggest expenses in retirement. Our medication costs continue to rise, and the out-of-pocket costs for other preventative services are astronomical.
For more insight on just how hard it will be to afford health care in retirement, HealthView Services dug into the details to quantify what new and future retirees will have to endure moving forward. Its health care data report for 2017 makes some bold predictions.
Over time, health care costs could exceed Social Security payments. And when we really break it down, it’s clear most of us won’t be able to afford that once it happens. Let’s go over why that is and review a few recommendations for how to combat such an uphill battle.
1. Health care costs are rising faster than inflation
The bread and butter of this report calls out the hard truth regarding the future of retirement and health care expenses. According to HealthView Services, health care costs will rise at an average annual rate of 5.47% for the foreseeable future — which is almost triple the U.S. inflation rate from 2012 to 2016 of 1.9%. To put it in context, if a 65-year-old couple retired today, they would spend $28,954 more in total lifetime retirement health care expenses than a couple who retired in 2016.
Next: The facts about Social Security aren’t much better.