According to an article in InvestmentNews.com, retiree healthcare costs could reach 98 percent of Social Security benefits within eight years:
“Average health care costs for middle-income retirees are on a path to exceed their Social Security benefits, according to a newly created Retirement Health Care Cost Index. The index devised by HealthView Services, a provider of Medicare, Social Security and long-term-care planning tools, measures the percentage of Social Security benefits required to pay for health care-related costs in retirement for a healthy couple receiving the average expected Social Security benefit at full retirement age.”
This means there is a financial health care crisis coming for senior citizens that will be a catastrophe equal to or bigger than Hurricane Katrina. An average American healthy couple who retired in 2015 will have to pay out-of-pocket a little more than $360,000 for health care before they die. That figure is not adjusted for inflation, either and in 20 years, healthcare costs will exceed the average Social Security monthly benefit.
Because the Social Security benefit makes up the major portion of monthly income for 90 percent of retired folks, it will be devastating to have to use this money to pay for healthcare like hospitals, doctors and long-term care. It will literally wipe out all savings. And as one partner uses up the vast majority of retirement savings, due to health care costs, the surviving spouse will be financially destitute.
What to do? It is more important than ever to cut expenses, save more money now, and be prepared before this storm hits your shore. Today, more than at any time in our nation’s history we need to take care of ourselves first, and not look to the government. Social Security benefits are wonderful to have to pay for healthcare costs, but this is about all they will be able to cover, so don’t count on benefits being enough to cover healthcare AND daily living expenses in retirement. I cannot emphasize enough, that soon 100 percent of your monthly Social Security income will be spent on healthcare expenses.
I suggest you go to www.moneymastery.com and sign up for the basic plan for $4.95 a month, then follow the easy 7 Steps program to set up a Spending and Debt Plan. With these two plans in place you will have a mirror in front of you that will help you look directly at the state of your financial situation. If you don’t like what you see, then you can ask for personalized coaching. If you don’t take action today, when your Health-Care-Katrina-Storm hits, it will be too late. It takes time for you to learn and grow and take actions that will keep you safe in the future. Start now by at least learning what your options are today so you can make better decisions for tomorrow.