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Budgeting Health Care for a Dream Retirement

Say you’ve been planning your dream vacation. You know the destination and the activities down to every single restaurant.

But if you haven’t budgeted, your dream vacation might turn out not so dreamy.

It’s the same with retirement. You’ve planned for years. But if you haven’t budgeted for your health care costs, retirement might not be as fun as you thought.

Health Care Costs

Medicare covers many health care costs. But you must also think about all the other out-of-pocket health costs. (Rates listed below are for 2022; they’re updated every year.)

Medicare premiums

  • Part A: Usually free, but you could pay from $274 to $499 per month if you didn’t pay enough in Social Security taxes
  • Part B: Starts at $170.10 per month and goes up depending on income
  • Part C: On average, costs $33 per month, but the monthly premium is often $0
  • Part D: On average, costs $31.50 per month; make sure you know what your medications cost under the plan you choose
  • Medigap: From $143.46 to $235.87 per month; depends on carrier and state you live in


  • Part A: $1,566
  • Part B: $233
  • Part C: Deductibles vary; depends on carrier and plan selected
  • Part D: The most you’d pay is $480; some drug plans have a $0 deductible


  • Part A: Covers up to 90 days per benefit period, plus 60 additional days over your lifetime, from $0 per day up to $778 per day
  • Part B: Covers 80 % after you meet your deductible


  • Part C: Varies, ranges from $0 to $50 per visit; depends on carrier and plan selected

You may also have other costs not covered by Medicare. For example, long-term care costs can average from $4,500 to $9,034 per month, according to Genworth.

How Much You Can Afford

Once you understand your costs, work out a budget based on real numbers. You also need to know your retirement income and how much you need for paying ongoing non-health care expenses. Your retirement income includes savings, resources, retirement funds, and Social Security.

If you’re not retired yet, now is the time to build up your savings. This could include contributing to a health care savings account, or HSA. You can’t contribute to an HSA after you enroll in Medicare. But you can use the tax-free money after you turn 65 to pay for:

  • Out-of-pocket costs such as premiums for Parts A, B, C, or D
  • Deductibles
  • Copays
  • Coinsurance
  • Dental and vision expenses
  • Over-the-counter medications

Long-term care insurance is another cost to think about. According to the Urban Institute and U.S. Department of Health and Human Services, the average 65-year-old has a 70% chance of needing long-term care in their lifetime. The minimum cost for long-term care is $4,500 per month.

Make the Most of Your Planning

Be sure to review your current Medicare health care plan every year. Ask yourself if it still works for your needs and budget. If not, you can join, switch, or leave your plan during Medicare’s Annual Enrollment Period. It starts October 15 and ends December 7.

Also check if Medicare Parts A and B premiums or deductibles went up in cost. For Medicare Advantage or Medicare Part D plans, ask questions like:

  • Have premiums, deductibles, or copays changed?
  • Are my medications still covered?
  • Is my pharmacy still in network?
  • Are my doctors still in network?

Review all plan costs. For example, a plan may have low premiums but high copays. It could end up costing more than a plan with higher premiums. To compare plan costs in your area, visit and enter your ZIP code.

Your Dream Retirement

Planning a budget isn’t always simple. Our licensed insurance agents can help guide you through your Medicare costs. And they’ll help figure out the plan that’s right for you and your budget.

Give us a Call

1-844-672-0317 (TTY: 711)
9 AM to 6 PM ET

MR565 8/2022