Happen to Have a spare $220,000 on you?

That lofty sum is what Fidelity estimates the average husband and wife, both age 65 and retiring this year, would need in current dollars to afford medical expenses for the rest of their lives.  You may have already heard that figure since it gets quoted a lot.

But is it realistic?  Some experts argue that it’s too low since it doesn’t include things like dental costs, or long term care, or Medigap.  On the other hand, that figure doesn’t factor in the cost savings that some retirees get because of employer-provided health coverage.

For a more personalized estimate, try AARP’s free Health Care Costs Calculator, at aarp.org/work/work_tools.  On the first page of the calculator, you plug in some personal information (but nothing that identifies you).  The second page asks you to input health conditions that you have now or might have later in life.  And the third page projects how much you-and Medicare-would pay.  It’s eye opening.

AARP’s calculator has limitations, but it gives you something concrete to hang your hat on…and, more importantly, to plan for.

Health habits can prevent or lower health care costs.  According to AARP’s tool, high blood pressure, high cholesterol, and an unhealthy weight could cost upwards of $27,000 or more during typical retirement.

But there are also other ways to plan ahead for future health care costs.  New strategies have come out recently that allow you to put money in a savings vehicle that earns interest (not a lot of interest…about what a typical savings account would pay).  But these accounts automatically double if you need the money for things like long term care.  And if you ever need the money for some other kind of unforeseen emergency, you can still get it!  This “win-win” account is a great place for that rainy-day money we all have stashed away!

There are also strategies to give you income in retirement that doubles if you have a health care emergency or need.  These are just two of the many new ideas that have been developed over the last couple of years.

Whatever you do, though, make sure you have a plan in place today to tackle tomorrow’s inevitable health costs.  By planning, you lift that burden off not only yourself, but your loved ones as well.

21-Point Checklist with Video

There are legal, governmental and personal documents available to you free of charge that could qualify you for additional benefits, tax savings, Medicare savings and Identity Protection.

What has changed significantly in the last 5 years?

  1. Privacy laws have eroded our ability to protect our personal affairs
  2. Tax laws have become even more complicated… hiding easy to do tax reductions from the average tax payer
  3. Health insurance and medical coverage has become a complicated and arduous endeavor
  4. Banks and Financial institutions have instituted actions to protect themselves… things that can actually hurt the unknowing customer

Why Do You Need the 21-Point Checklist?

  • The Consumer Financial Protection Bureau said information found in the 21-Point Checklist and resources like it are essential for everyone to have. 1
  • The U.S. Treasury said that tools like the 21-Point Checklist can help close the gap Americans face in understanding the resources available to them. 2
  • A leading research study (Harris Interactive) found that 86% of Americans would benefit from having information a personalized 21-Point Checklist makes available to you.3
  • Studies reviewed by the Library of Congress found that though many Americans believed they knew what benefits they qualified for… almost none were aware of the benefits covered by the 21-Point Checklist. 4
  • Empirical research pursuant to the Dodd-Frank Act Section 917 finds that the kind of information available through the 21 Point Checklist is essential to the middle and upper-middle class American. 5
  • The Securities Exchange Commission (SEC) report found that the specific examples and simple illustrations of benefits like those shown in the 21-Point Checklist are essential to every American. 6
  • The same SEC report found that the clear, timely and easily accessible information available in resources like the 21-Point Checklist are exactly what everyone needs to navigate the public, private and personal decisions when it comes to their finances and health. 4

 

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  1. Study by Richard Coudra, Consumer Financial Protection Bureau; FINRA Investor Education Foundation; May 2013; Financial Capability in the United States, Reports of finding from the 2012 National Financial Capability
  2. Study by Cyrus Amir-Mokri, United Sates Department of the Treasury; FINRA Investor Education Foundation; May 2013; Financial Capability in the United States, Reports of finding from the 2012 National Financial Capability
  3. FINRA Investor Education Foundation; May 2013; Financial Capability in the United States, Reports of finding from the 2012 National Financial Capability Study
  4. Section 917 of the Dodd-Frank Wall Street Reform and Consumer Protection Act; A Study Regarding Financial Literacy Among Investors by the Staff of the US Securities and Exchange Commission; August 2012
  5. Public Comment and Empirical Research Pursuant to Dodd-Frank Act Section 917(a)(2)-(4)  A Study Regarding Financial Literacy Among Investors by the Staff of the US Securities and Exchange Commission; August 2012
  6. Empirical Research Pursuant to Dodd-Frank Act Section 917(a)(2)-(4)  A Study Regarding Financial Literacy Among Investors by the Staff of the US Securities and Exchange Commission; August 2012