How to Create a Comprehensive Plan for Longevity and Healthcare Costs

Longevity is an essential variable in any retirement planning calculation. It’s also one of the most difficult figures to accurately predict. Like with inflation, retirement savers can make informed assumptions about their longevity and build in contingencies for different scenarios, but it’s impossible to predict with complete accuracy.

The monthly and annual costs of healthcare can be more easily ascertained and managed, particularly for retirees able to afford comprehensive Medicare Advantage plans, Medigap insurance and long-term care insurance for the remainder of their lives.

Not every retiree can be confident in the durability of their savings or the quality of their health insurance. Developing realistic plans and adopting strategic lifestyle and financial practices may help ensure funds last for as long as possible.

Projected Longevity and Healthcare Considerations

There is no shortage of life expectancy data available from U.S. government agencies, including a detailed actuarial life table from the Social Security Administration.

Although these resources are valuable, what they reveal about individuals is limited. Family health history, personal medical conditions and lifestyle choices are more important considerations for real retirees.

Longevity is also a moving target. What may have seemed like a reasonable assumption at age 65 might need to be revised by 70 or 75. Regular health assessments are a crucial tool retirees can leverage to maintain an accurate picture of both their current health status and potential future needs.

Innovations in medical technology are having a dramatic effect on the ability of seniors to track current health, diagnose serious diseases and manage chronic conditions. These tools contribute to higher survival rates and a better, more active quality of life for many retirees.

Seniors who schedule regular primary care health assessments and use modern wearable devices or apps to actively monitor their health may have an easier time making informed longevity projections.

Estimating Healthcare Costs Based on Lifestyle Preferences

Budgeting and planning are important for every aspect of retirement, including healthcare. Typical living expenses, discretionary funds and foreseeable purchases or expenditures should be factored into your long-term retirement savings plan.

Projecting budgetary scenarios may allow you to ascertain the healthcare spending levels you can afford to maintain. This information can help you decide whether you need to establish separate accounts or policies dedicated to unexpected healthcare or long term expenses.

Where you retire can have a significant impact on all these costs. Retirement savers in Phoenix who are planning to stay in the metro area will have different budgetary needs than those who plan to retire in another state. Geography can also impact healthcare and long-term care accessibility and costs, all of which should be considered when making budgetary plans.

Inflation is another variable to account for in your healthcare budgeting. Healthcare costs have historically risen more quickly than general inflation. Increasing demand combined with limited practitioners, especially in vital fields like geriatric care, can increase cost and availability.

It may be in your best interest to work with a retirement planning or Medicare planning specialist to develop projections and begin budgeting for healthcare expenses as soon as possible.  

Contingencies for the Unexpected

Emergency savings accounts are far from the only financial tools available for retirees seeking security in the face of unpredictable healthcare needs. There are a variety of life insurance and annuity riders that can help cover unexpected healthcare expenses. Incorporating these types of multi-purpose policies can still be valuable even if the funds aren’t tapped for healthcare emergencies.

Although not strictly a healthcare budgeting task, seniors can experience enhanced peace of mind by going into retirement with a solid estate plan. Financial advisors and estate planning professionals can explain your healthcare directive and power of attorney options and how they can be incorporated into wills and trusts.

A thorough estate plan that incorporates contingencies can help ensure that, if an unexpected health event does occur, it won’t derail you or your spouse’s financial strategy or desired retirement lifestyle.  

Learn About Your Healthcare Budgeting and Planning Options From Our Phoenix Retirement Planners

Concerns about longevity and the durability of savings in the face of health emergencies are common among Phoenix retirees. Uncertainty is unavoidable, but risks can be mitigated through planning. The retirement planners at Fullerton Financial Planning are here to help bolster your confidence in your long-term healthcare plans. Call us at (623) 974-0300 to schedule a consultation.