4 big expenses you could face in retirement | Health and Fitness | journalstar.com - Lincoln Journal Star

Retirement planning is part savings, part guessing game. While many of your day-to-day expenses will remain the same, there are big-ticket categories that can take a large bite out of your savings. The more you can plan, the better prepared youâll be to weather the costs.

Here are four expenses to keep in mind as you prepare for retirement:

The average 65-year-old retired couple will need about $300,000 in after-tax savings to handle health care costs in retirement, according to a 2021 report from Fidelity. Fidelity is a NerdWallet partner. âAnd thatâs just for regular health care,â says Michelle Gessner, a certified financial planner in Houston. âThatâs not even counting unexpected chronic illness care.â

Your specific costs will depend on where you live, how long you live and your overall health. Taking care of your health and adequately managing conditions like Type 2 diabetes can help keep costs lower.

People are also reading…

Rep. Jeff Fortenberry found guilty on all three counts

Tragedy strikes campaign to legalize medical marijuana in Nebraska

Steven M. Sipple: Assessing Betts’ situation and Huskers’ WR group without him

Group of teens, 13 and 14, accused of going on car-stealing spree from Lincoln to Chicago

Review: Elton John has the perfect way to say goodbye at PBA

Frost says Zavier Betts ‘not a member of the team’; no updates on Fidone

Girls basketball: The 2021-22 Super-State, all-state and honorable-mention honorees

‘Wild West territory’: New fight over pipelines emerging in Nebraska

Former North Bend teacher sought in abuse case

Don Walton: Fortenberry resignation personally tragic, politically complicated

Fortenberry to resign from Congress, setting the stage for special election

A year after son’s death in Lincoln motorcycle crash, family asks, ‘Where’s the justice?’

Jeff Fortenberry trial offered tangled web of oddities

Boys basketball: The 2021-22 Super-State, all-state and honorable-mention honorees

Describing Raiola as ‘very, very interesting guy,’ Nouili says new coach changes OL mentality

The other health care surprise is that Medicare premiums are higher if your income is above a certain level. For example, if youâre married filing jointly with a modified adjusted gross income over $182,000 in 2020, youâll pay at least 40% more for your Medicare Part B monthly premiums. In 2022, the standard premium costs about $4,000 a year for a couple.

âIt really creeps up,â says Laurie Burkhardt , a CFP in Boston. âAnd itâs easy, believe it or not, to get to that income level when you are at the age where youâre taking required distributions from your IRA.â

Seniors who live to 80 have about a 1-in-4 chance of needing long-term care. And itâs not cheap: An assisted living facility costs $4,500 a month, on average. And while a home health aide averages about $27 per hour, the costs add up.

âThatâs pretty reasonable if you only need a few hours of care per week,â says Patti Black, a CFP in Birmingham, Alabama. âThat math becomes unworkable, the more care you need.â

Certified financial planners can help clients project costs for a few years of long-term care to ensure their savings can handle it. âI talk with clients about whether long-term care insurance should be part of their financial plan to transfer some or all of this risk,â Black says.

The average senior on Medicare using dental services paid nearly $900 a year out of pocket, according to the Kaiser Family Foundation. And 1 in 5 Medicare beneficiaries spent more than $1,000.

Original Medicare doesnât cover most traditional dental care, and 47% of Medicare beneficiaries go without any dental insurance. But gum disease, tooth loss and oral cancer are all greater concerns for seniors, and finding comprehensive dental insurance can be difficult.

âDental procedures can be a really rude awakening,â Burkhardt says. âIâm going through it right now with my husband, who is retired and is getting a dental implant. Heâs been shocked at how much the out of pocket is.â

Since 2015, at least 1 million enrollees per year in Medicare Part D have had drug costs high enough to exceed the catastrophic coverage threshold, which is $7,050 in 2022. If you have a condition that requires specialty tier drugs â such as cancer, multiple sclerosis or hepatitis C â your out-of-pocket costs can be exceptionally high. Once you hit the catastrophic threshold, youâll pay either a small coinsurance or copay for drugs , but thereâs no cap on out-of-pocket spending under Medicare Part D; it can add up if your drug is expensive.

âMy dad has rheumatoid arthritis, and his drugs cost $6,000 per month,â says Tess Zigo, a CFP in Palm Harbor, Florida. âWhat retiree has $6,000 a month just for drugs?â

A financial planner specializing in retirement needs can stress test your financial plan for health events and other expenses. If there are gaps in your coverage, they can help you with strategies to address unexpected costs, such as considering long-term care insurance or a hybrid policy that combines life insurance with a long-term care rider.

Getting the right insurance, from Medicare Supplement plans to dental and drug coverage, is also essential.

âIf the coverage is correct, then those catastrophic expenses arenât so bad,â says Dennis Nolte, a CFP in Winter Park, Florida.

A good insurance broker can help you weigh your options, and a Medicare consultant â or a call to your State Health Insurance Assistance Program or SHIP â can answer your questions about the best Medicare coverage for your needs.

This article was provided to The Associated Press by the personal finance website NerdWallet. Kate Ashford is a writer at NerdWallet. Email: kashford@nerdwallet.com.

NerdWallet: What is Medicare, and what does it cover? https://bit.ly/nerdwallet-what-is-medicare-and-what-does-it-cover

State Health Insurance Assistance Program https://www.shiphelp.org/