Retirement Planning: 4 Unexpected Eldercare Costs To Consider
Estimating your expenses in retirement can be tricky. There are some savings when you stop working, as you will no longer have to pay for things like commuting expenses, a work wardrobe and take-out lunches. And you’ve probably factored in the cost of the things you want to do now that you don’t have to be at a desk during work hours, like traveling or extra rounds of golf. There are some costs that can take retirees by surprise, however. They include healthcare costs and some other incidental costs that come with getting older.
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Here are four unexpected costs of eldercare you should consider in your retirement planning.
Healthcare Costs
Medicare and so-called medi-gap insurance plans cover much of the cost of healthcare for retirees who don’t need long-term care. But even these plans have a deductible or co-payment requirement that can take new retirees by surprise.
According to the Fidelity Retiree Health Care Cost Estimate, a 65-year-old couple who retired in 2023 may need to have $315,000 saved to cover their healthcare costs in retirement. This is above and beyond what is covered by Medicare and medi-gap insurance coverage.
One tip: If you have a health savings account, or HSA, at work, you can contribute pre-tax dollars and withdraw them tax free in retirement to pay for healthcare expenses. This is a great way to not only save for your retirement healthcare expenses, but reduce your tax burden as well.
Learn More: Cutting Expenses in Retirement — 5 Grocery and Dining Costs To Eliminate
In-Home Care
Some individuals prefer to go to a nursing home, although many elderly people don’t need that level of care. Getting care in your own home allows you to “age in place,” which is not only less expensive than moving to a facility, but also what many people prefer.
According to A Place for Mom, the median cost of home care is $30 per hour. This can vary widely depending on how much care you require, the type of care and your location. Home care providers may take on different tasks, from light housekeeping and meal preparation to administering medications and monitoring vital signs — if they are credentialed to provide the latter options.
Housing-Related Costs
One of the costs people tend not to think about when they age is the cost of not being able to do some of the tasks you’re used to performing around the house. At a certain point, many elders will need to start to pay someone else to mow their lawn, plow their driveway in winter, and even plant the annuals in the garden. Minor home repairs that you used to be able to do yourself may need to be outsourced as well — all at a cost.
Transportation Costs
Just as there may come a time when you can no longer do projects around the house, there may also come a time when you cannot drive. The irony here is that you may also have to get to more places, as your medical appointments typically increase in number as you age. If you don’t have friends, family, or public transportation you can rely on, you may find yourself having to hire a car service — or use Lyft or Uber — to get where you’re going.
Planning ahead for these costs can help you to enjoy your retirement without worrying about unexpected costs.
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