Retirees have a 70% chance of needing long-term care in their remaining years and medical and health care expenses tend to pile up quickly for the 65-and-over population. (Courtesy of unsplash)

In fact, they have a 70% chance of needing long-term care in their remaining years. Other medical and health care expenses also often pile up in retirement

By Dariusz Godlewski
Special to the AFRO

Needing long-term care in our senior years is something many people don’t like to think about, much less plan for. But statistics show that a sizable majority of today’s 65-and-over population will eventually require some type of long-term care services, which are expensive.

In fact, they have a 70% chance of needing long-term care in their remaining years. Other medical and health care expenses also often pile up in retirement. An average 65-year-old couple will spend $295,000 on those costs throughout retirement, excluding long-term care. With these potential bills posing threats to a stable retirement plan, it’s important to find ways to protect the savings nest egg.

“Medical bills and long-term care don’t have to drain your retirement savings,” Godlewski said. “But they will if you ignore the data and don’t plan accordingly.”

“A lot of people think Medicare covers most or all of your healthcare in retirement, but that’s not accurate. As healthcare inflation continues, there are financial planning steps you can take and effective savings strategies to create a cushion in your nest egg for those needs.”

Godlewski suggests these ways to protect your retirement plan from high medical, health care and long-term care costs:

Health Savings Account. Having an HSA is a way to build a nest egg to cover future healthcare costs, and it’s also a tax-efficient savings option. “You can contribute tax-free money, not pay taxes on earnings, and withdraw the money tax-free now or in retirement to pay for qualified medical expenses,” Godlewski said. “And you can also put your HSA dollars to work by investing them. Some choose an investment strategy that’s more conservative than their overall retirement investment strategy.” Those enrolled in Medicare can’t make new contributions to an HSA.

Long-term care insurance. Purchasing this kind of policy results in receiving a monthly benefit toward long-term care, either for a specified period or the remainder of one’s lifetime. One dilemma, Godlewski explained, is that long-term care insurance is expensive and policy holders buy it without knowing whether they will ever need to use it. Another option, he said, is purchasing a life insurance policy with the option of adding a long-term care insurance rider. “An LTC rider allows you to receive part of the death benefit while you’re still alive,” Godlewski said. “The death benefit can be used for long-term care expenses. The rider can be triggered by the diagnosis of an illness that leaves you unable to care for yourself.”

Investments. Investing for growth maximizes your savings and creates more room to meet future medical bills. “The idea is for the assets to grow more than the inflation rate for medical expenses, which has usually been higher than consumer inflation,” Godlewski said. “There’s a risk in the medical expenses context of over-allocating to fixed-income investments. That strategy, coupled with today’s low interest rates and the effects of inflation, would lead to diminished purchasing power.”

“The costs can seem daunting, but most retirement healthcare costs can be dealt with if you’ve done proper planning,” Godlewski said. “Viewing those costs as an annual expense can make it easier to plan for and pay for them.”

Dariusz Godlewski ( is the president of Financial Wealth Alliance and a licensed investment adviser representative with Brookstone Capital Management. He holds a life insurance license and has passed the Series 65 securities exam. 

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