The average 65-year-old retiring today could expect to spend $157,500 on healthcare costs throughout their retirement, even with Medicare coverage, according to a study by Fidelity Investments. For married couples, that rate increases to $315,000.
The 2023 estimate remains flat from the previous year as provisions in the Inflation Reduction Act are expected to limit out-of-pocket prescription drug costs for retirees beginning in 2025, Fidelity said.
Plan Ahead: Understanding Future Healthcare Costs in Retirement
While this year’s estimate offers a welcome reprieve from a decade of increasing healthcare costs, retirees are still expected to cover significant costs above and beyond what Medicare covers, Hope Manion, Fidelity Workplace Consulting senior vice president and chief actuary, said in a statement.
Understanding what your healthcare costs may be in the future is an essential part of the retirement planning process.
An average couple expects to spend just $41,000 on healthcare once they retire, according to Fidelity.
If high-interest debt is getting in the way of your retirement savings, you could consider paying it down with a personal loan at a lower interest rate.
Passed in 2023, the Inflation Reduction Act contains provisions designed to improve the Medicare program and expand benefits for retirees. Here’s a glance at how it aims to improve Medicare Part D.
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Medicare’s Price Negotiations: Lowering Drug Costs for Seniors
$35/month for covered insulin prescriptions Annual cap of $2,000 on out-of-pocket prescription drug costs in Medicare, beginning in 2025.
Expansion of the low-income subsidy program or Extra Helpunder Medicare Part D to 150% of the federal poverty line, beginning in 2024.
In addition, Medicare will be able to negotiate with drug manufacturers to lower the price of some brand-name Medicare Part B and Part D drugs.
Moreover, drug companies that increase their drug prices faster than the rate of inflation would be required to pay Medicare a rebate.
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