Is This the Biggest Threat to Your Retirement
What is your retirement dream?
How about traveling the world, visiting the Louvre, the Vatican and Big Ben? Maybe you’d go golfing every day… or buy a motorhome and travel the good ol’ USA.
Maybe you’d go on more vacations with your family. Or maybe you’d simply enjoy the extra stress-free time playing with your grandchildren.
Maybe you’d finally be able to pursue your passions and hobbies.
Whatever your retirement dreams are, they are going to cost money. While many of us squirrel away money to finance those retirement dreams, one reality that almost everybody ignores is the largest retirement expense of all.
Health Care: The Retirement Dream Killer
According to a study from Fidelity, a 65-year-old couple retiring today will spend an average of $285,000 on health care expenses. That works out to $150,000 for the average woman and $135,000 for the average man.
Keep in mind those are the out-of-pocket costs above and beyond what Medicare covers.
Worse yet, that doesn’t include the cost of long-term care or nursing home expenses. Of course, some of us will and some of us won’t end up in a long-term care facility. But the average health care costs rise to $463,849 per couple once you include long-term care expenses.
Now, those are just averages, but if you:
(a) Have more health problems than average or
(b) Are lucky enough to live longer than the average American…
Your health care costs could be much higher.
Remember, that $463,849 is just for health insurance premiums, health care expenses and long-term care insurance — the costs necessary to keep you healthy enough to enjoy your dream retirement.
It doesn’t include the cost of your dream retirement. It doesn’t include the airplane tickets, hotels, beach houses, motorhomes, cruise fares and green fees. And it certainly does not include everyday expenses such as food, utilities, gasoline and taxes.
Don’t let these numbers overwhelm you, though.
There are two things you can do now to help minimize those expenses.
How to Properly Plan for Your Retirement Health Care
Max out Your Health Savings Account (HSA): If you have access to a health savings account, or HSA, shove as much money as you can into it. HSAs have a unique triple tax benefit for health care expenses:
- Money goes in pretax, just like with a 401(k)
- All the growth is tax-deferred, just like with a 401(k)
- Withdrawals used for qualifying health care expenses are also 100% tax-free.
The results will vary based on your tax bracket and your investment results, but you can reduce the cost of that $463,849 by several hundred thousand dollars!
Prepay Nursing Home Costs for Dimes on the Dollar: There is a new IRS-approved asset class that lets you prepay (tax-free) for long-term care expenses. And it lets you do this for dimes on the dollar.
Every dollar you deposit into one of these prepaid long-term care plans will immediately balloon 300%… 500%… even as much as 1,000%, depending on your age and health.
That’s right… Every $10,000 turns into $40,000, $60,000 or even $110,000 of long-term care coverage.
$50,000 could turn into $200,000, $300,000 or even as much as $550,000!
Best of all, if you’re one of the lucky ones who never need long-term care, 100% of your money — a complete refund of your premium — is returned to you or your heirs.
To learn more, my friend David Phillips has prepared a free special report here.
Bottom line: All of us have retirement dreams, but most Americans are inadequately prepared to handle the most dangerous retirement dream killer there is: health care costs.
Use the two programs I listed above to help ensure you don’t fall victim to the No. 1 retirement savings killer.
Here’s to growing your wealth,
Chief Income Expert, Mike Burnick’s Wealth Watch