When you’re planning for retirement, one of the biggest questions you will want to ask yourself is, “what will my healthcare cost me in retirement?”
Your healthcare will be one of your biggest costs in retirement, so having accurate numbers is important.
In this post, I want to clarify what you can expect to pay for Medicare or healthcare costs in retirement.
First off, the average cost in 2021 for most people on Medicare currently is around $250 per month.
There can be some varying costs depending if you go Original Medicare or Medicare Advantage. Either way, let’s break that average monthly cost down for premiums:
Medicare Part A: “Free” (as long as you or your spouse have worked 40 quarters.)
Medicare Part B: $148.50 (this can be higher or lower depending on your income)
Medigap (supplement plan): $30-$300/month
Medicare Part D Drug Plan: $6-$200/month
Medicare Advantage: $0-$200/month
Medicare Advantage plans may say $0 premiums, but you will still have to the Medicare Part B premiums. We typically that our client’s premiums cost them around $250/month.
Now, I don’t want any of you to get confused, though. You will incur additional costs while on Medicare. The $250/month is just for premiums.
When you choose your plan, you also need to look at the below costs to plan for additional costs:
- Premiums
- Co-Pays
- Deductibles
- Any out-of-pocket costs
- Prescription drug costs
I also tell our clients that they should prepare for a 2% to 5% price increase every year. For example, in 2019, Medicare Part B was $135.50 a month, and it jumped to $144.60 a month in 2020.
I have seen too many people only plan for premium costs, and I can promise you that you will be in for some big shocks if you do that.
