How Much Money Do I Need to Age the Way I Want?

Typical Costs of Aging

With increased life expectancies, some of us will face more years in retirement than we did working. A healthy, upper-middle-class couple who are 65 today have a 43 percent chance that one or both partners will live to see 95.

Healthcare Costs

A 65-year old couple can expect to need $280,000 for out-of-pocket healthcare expenses for the rest of their lives (excluding long-term care).

About 20% of retiree medical expenses are covered by patients out-of-pocket. 20% of this is for medications. 35% is Medicare Part B and D premiums. The remaining 45% includes deductibles, coinsurance and co-pays.

Long-Term Care Costs (and Misunderstandings)

70% of people will need some form of long-term care during their lives. Families provide more than $470 billion worth of care. However, at some point many elders and families need to rely on some paid care.

The average lifetime cost of long-term care is $172,000, with more expensive states averaging up to $244,000. These costs continue to rise steadily. This does not account for the value of informal care (unpaid care from loved ones and friends, which often comes with opportunity costs).

Medicare DOES NOT cover long-term care.

Medicaid and Veteran’s benefits may offer some assistance. These programs have certain eligibility requirements. Medicaid may be limited to care in certain settings (such as a nursing home) or may have a waiting list.

Day-to-Day Costs of Aging/Retirement Living

Older households spend an average of $45,756 per year, while you may spend far more depending on how you want to live.

How do you want to age?

An important consideration is looking not only at average costs of aging but how you want to age. Having more resources (not just financial) affords you more choices. Besides basic living expenses and healthcare/care needs, you may wish to travel and enjoy your (sometimes expensive) leisure hobbies. Financial advisors have typically advised that clients will need 70-80% of their pre-retirement income in retirement. But, more and more people are finding they don’t want to live with less.

Unfortunately, that conversation is irrelevant for many retirees. The 2016 Retirement Confidence Survey showed 26% of respondents only had $1,000 saved and more than 60% only had $50,000.

Beyond the enjoyable aspects of retirement, more resources also give you much more control over health and care options. Though support programs exist, they’re often overburdened and thus have waiting lists. If you need Medicaid assistance, for example, the nursing home program does not have a waiting list but programs covering other settings do. And, even though you may not have to wait to get help for the nursing home program, your choice of facilities is likely to be limited.

Planning to Age the Way You Want with Aging Wisely

Make a smart move for your retirement planning by meeting with an aging life care manager. We call our EasyLiving care managers “Aging Wisely Coaches”. They can help you understand costs, talk through your wishes, discuss these with family members (and be clear on expectations) and make a plan.

By looking at the type of needs (and wants) you may have, your aging wisely coach can help you create a projected budget. This allows you to better work with your financial advisor and make plans to ensure your hopes become reality.

To schedule a Life Choices Consultation with an Aging Wisely Coach, click here to contact us online or call us: 727-447-5845.

Smarter Spending: Navigating the Costs of Healthcare and Long-Term Care

A care manager can also help with smarter spending when you need care. For starters, we can provide a Medicare analysis. This personalized analysis offers recommended options for Medicare plans and insurance based on your health status, desires, income and other resources. We don’t sell any products, so all recommendations are based on your needs and our expertise in navigating healthcare with thousands of older adults.

Additionally, our care managers help clients understand and access benefit programs they need. With no one place to go for all the programs, it can be quite overwhelming to figure out what will help you...and how to get it. Your care manager can help you access an array of programs to best meet your needs. And, he/she will assist you to prepare what you need for eligibility and understand the process.

Most importantly, our coordinated care planning can help you avoid unnecessary expenses. They'll help you understand the big picture when it comes to costs of aging. Our Aging Wisely Coaches look at everything holistically. It does no good to know there’s an option out there if you can’t access it. On the other hand, many clients who could afford care aren’t even told about their choices because someone wrongly assumes they can’t afford it. Additionally, sometimes spending more at first provides long-term savings. These are all the complexities a professional care manager understands.

Save money, spend smarter: get the latest aging wisely tips, Medicare updates and more