We often hear members, especially younger members, express concern that Social Security will run out of money by the time they need it in retirement. While that is a valid concern, considering the rapidly aging population of baby boomers –there are many variables that are also worth planning ahead for– a major variable being medical expenses and understanding what Medicare will and will not cover.
According to the Employee Benefit Research Institute (ebri.org), a married couple that retired in 2010 would need $271,000 for out-of-pocket prescriptions costs and $454,000 for medical expenses – totaling $725,000 to cover medical expenses over a span of 20 years retirement – which could barely be covered by your 401(k) savings alone, if you started saving early!
As you can see, medical expenses can cost a lot more than you may have anticipated, so it is critical for those approaching retirement (and even younger adults) to gain a good understanding of what Medicare will and will not provide. If you are younger, you may need to adjust your savings plan to compensate for greater medical expenses in the future.
If you’d like to go over your retirement savings plan, simply schedule an appointment online with one of our CFS* Financial Advisors.*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (CFS), a registered broker-dealer (Member FINRA / SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. SF Fire Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.