The Silent Wealth Killer: Not Planning for Healthcare in Retirement

For many retirees, healthcare is the single largest—and most underestimated—expense in retirement. While people plan diligently for housing, travel, and lifestyle, healthcare often slips through the cracks until it’s too late. The reality? Rising medical costs can drain even the healthiest nest egg if you’re not prepared. At AlphaTrust, our Total Financial Management approach integrates healthcare into the retirement plan so clients can step into the future with clarity and confidence.

Step 1: Understand the True Costs of Healthcare

Retirees often assume Medicare covers everything—it doesn’t. Premiums, deductibles, prescription drugs, and long-term care add up quickly.

Action Step: Estimate healthcare costs with realistic assumptions. Today, a 65-year-old couple could spend hundreds of thousands of dollars on healthcare throughout retirement. Build this into your financial projections.

Step 2: Plan for Medicare and Beyond

Medicare is complex, and choosing the wrong plan can mean higher costs or gaps in coverage.

Action Step: Work with a healthcare and financial advisor to evaluate Medicare Part A, B, D, and supplemental options. Consider whether Medicare Advantage or Medigap is best for your needs.

Step 3: Prepare for Long-Term Care

The biggest threat isn’t routine doctor visits—it’s long-term care. Nursing homes, assisted living, or in-home care can cost more than $100,000 annually.

Action Step: Explore long-term care insurance, hybrid life insurance with long-term care riders, or self-funding strategies. Address this early—before costs rise or health changes.

Step 4: Use Tax-Advantaged Accounts for Healthcare

Healthcare savings isn’t just an expense—it can be a tax strategy.

Action Step: Contribute to Health Savings Accounts (HSAs) while eligible. HSAs offer triple tax benefits: contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free.

Step 5: Integrate Healthcare Into Your Retirement Income Plan

Too often, retirees separate healthcare from their overall financial strategy, leading to shortfalls.

Action Step: Build healthcare into your income planning. Align withdrawals, insurance coverage, and investment strategies so rising healthcare costs don’t derail your retirement lifestyle.

Failing to plan for healthcare in retirement isn’t just an oversight—it’s a wealth killer. By anticipating costs and integrating them into your broader financial plan, you safeguard not only your money but also your peace of mind. At AlphaTrust, we ensure healthcare planning is an essential part of Total Financial Management—covering insurance, long-term care, taxes, and retirement income—so your wealth supports you through every stage of life.