Baby boomers shouldn’t lose sleep over the cost of health care in retirement, as medical expenses tend to become more volatile.
According to an expert in a Forbes article, “Before retirement, the variation in medical insurance premiums plays a huge role in the cost of medical care.” Afterward, he advises seniors to consider saving in a tax-advantaged health savings account to prepare for unforeseen medical expenses in retirement. (Forbes)
Larry Light: How do you assess the prospect of a medical spending catastrophe for retirees?
Rick Kahler: Have you ever worried yourself into a frenzy over something, only to find out you were worrying about the wrong thing? Researchers say that baby boomers are more worried about being financially devastated by unexpected health costs in retirement than they are about outliving their retirement savings.
Light: But isn’t the cost of health care a legitimate worry?
Kahler: We all have heard the stories of people who lost their homes, savings and retirement portfolios paying for exorbitant medical expenses due to an unforeseen health problem. Just recently Fidelity reported that the average couple will spend $280,000 on health care in retirement.