Quiz: How Much Have You Thought About Health and Healthcare Costs in Retirement?

healthcare in retirement

When planning for retirement, it's important to consider a wide variety of factors. One of the most important is health and its associated costs. Thinking about your future health and the rising cost of healthcare can help you better plan for retirement in terms of both your finances and overall well-being. This quiz can help you assess your current knowledge of health and healthcare costs in retirement.

Questions:

  1. True or False: Healthcare costs typically rise faster than the rate of inflation.

  2. True or False: You could need more than $500,000 just to cover healthcare costs in retirement.

  3. True or False: Medicare covers the costs of long-term care, as well as most other medical costs.

  4. True or False: The southern, warmer states are generally the healthiest places for seniors to live.

  5. True or False: If you're concerned about healthcare costs in retirement, you can just delay your retirement in order to maintain your employer-sponsored health benefits.

See the full list of answers to the above questions on health and healthcare costs in retirement.

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Take the quiz below to asses your current knowledge of health and healthcare costs in retirement.

healthcare in retirement

Answers

  1. True. The average inflation rate from 2010 to 2017 was less than 2%, while the average spending on prescriptions, doctors, and hospitals grew between 4% and 5%. From 1970 to 2017, annual per-capita out- of-pocket spending on healthcare grew from about $600 to approximately $1,100 (in 2017 dollars).1

  2. True. In 2017, America's Health Rankings projected that a 45-year-old couple retiring in 20 years could need about $600,000 to cover their healthcare costs, excluding the cost of long-term care. The same report projected that about 70% of those age 65 and older will need some form of long-term care services. And according to the Department of Health and Human Services, the average cost of a one-year stay in a nursing home (semi-private room) was $82,000 in 2016.2

  3. False. Original Medicare Parts A and B help cover inpatient hospital care, physicians' visits, preventive care, certain laboratory and rehabilitative services such as physical therapy, and skilled nursing care and home healthcare that are not long term. Medicare Part D helps cover the cost of prescriptions (within certain guidelines and limits). Medicare does not cover several other costs, including long-term care, dental care, eye exams related to eye glasses, and hearing aids. Seniors may need to purchase additional insurance to cover these and other services not covered by Medicare.3

  4. False. Interestingly, America's Health Rankings found that the five healthiest states for seniors were (1) Utah, (2) Hawaii, (3) New Hampshire, (4) Minnesota, and (5) Colorado.4

  5. Maybe true, maybe false. Many people believe they will work well into their traditional retirement years, both to accumulate as large a nest egg as possible and to take advantage of employer-sponsored health benefits (if offered beyond Medicare age). While this is an admirable goal, you may not be able to control when you actually retire. In a 2018 retirement survey, nearly 70% of workers said they planned to work beyond age 65; 31% said they would retire at age 70 or older. But the reality is that nearly 70% of current retirees retired before age 65. Many of those individuals retired earlier than planned due to a health problem, disability, or other unforeseen hardship.5

The bottom line is that while it's hard, if not impossible, to predict your future health needs and healthcare costs, it's important to work these considerations into your overall retirement planning strategies. Take steps now to keep yourself healthy — eat right, exercise, get enough sleep, and manage stress. And be sure to account for healthcare expenses in your savings and investment strategies.

1Consumer Price Index, Bureau of Labor Statistics, 2018, and Peterson-Kaiser Health System Tracker, 2018

2Preparing for Health Care Costs in Retirement, America's Health Rankings, 2017, and LongTermCare.gov, 2018

3Medicare.gov

4Senior Report, America's Health Rankings, 2018

52018 Retirement Confidence Survey, Employee Benefit Research Institute

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