Personal Finance

I'm in my 50s and trying to plan for healthcare costs after Medicare and not sure about the reasonable projections and co-pays

Aaron Webber

Published: November 28, 2024 10:30 am

Key points:

• Reasonable conservative estimates of Medicare costs range between $300–$450 per person per month.
• It is hard to project healthcare expenses in advance. Wait until the years before retirement.
• Is your 401(k) optimized for your retirement plans? (Sponsored)

Is it possible to predict how much your medical expenses will be in retirement? How realistic is it to budget for medical costs years in advance? These, and other similar questions, are just a few that people approaching retirement might find themselves asking.

This is true of one user online who went to the r/ChubbyFIRE subreddit, a community of people focused on financial independence and early retirement, to get the opinion of strangers about medical expenses during retirement.

Here is what they had to say. Please remember that the comments found in Reddit, or in this article, are opinions and you should always consult your financial advisor before you make any financial decisions.

The Question

The author of our post in question is in their mid-50s and is trying to create a model of their projected healthcare expenses after they sign up for Medicare at age 65. They plan on living to 95 years old and wanted some reasonable and conservative projections for yearly spending.

They said they had difficulty finding any useful guides or resources online. They did not give any background on their personal financial situation, but since they are active in the r/ChubbyFIRE community, it is safe to assume they have substantial savings or investments they can rely on.

The Community Response

There were a few useful estimates presented in the comments, but no matter what the numbers were, almost all the responders agreed on one thing: it’s pretty hard to estimate healthcare costs so far in advance, and the usefulness of such a model is limited until you get closer to retirement age.

This is due to a few factors.

First, life is unpredictable. It’s hard to know what health complications will arise before retirement. Runaway inflation can render any reasonable estimate useless, and regulation and legislation changes can wildly impact the cost of healthcare. That being said, most responses recommended a conservative budget of between $350–$450 per person per month. This includes Medicare premiums and supplements. However, most people agreed that with enough savings and investments, the differences in costs between Medicare plans really don’t matter, and it isn’t worth worrying about.

Second, there is always significant doubt surrounding the future of Medicare. Republicans in Congress have made cuts to Medicare one of their primary campaign promises and the strengthening of the private sector over public options (including the elimination of the Affordable Care Act) have been popular political hallmarks of recent candidates. Some of the commenters on this question believe that Medicare will not be a reasonable option in a few years, making any model or budget a waste of time.

In the end, the most reasonable course of action, based on the number of responses, was to plan on between $300–$450 in monthly expenses per person. This gives some wiggle room for inflation, cost increases, and other issues. With the amount of assets of people in this community, such a budget should be easily manageable.