Keeping pace with rising healthcare costs

With many Americans living into their 90s1, retirement can last 30 years or more. If you’re worried about the impact healthcare costs may have on your retirement income, you’re not alone—and you’re right to want to prepare.
Over the last 10 years, healthcare costs have outpaced inflation costs by more than 14%. And this trend shows no sign of stopping.
In fact, three of the top five most surprising retirement expenses are healthcare related—major dental, out-of-pocket medical or prescription costs, and illness or disability.2

Healthcare costs rising faster than inflation

Healthcare costs rising faster than inflation
 
Inflation rate data from BLS CPI table: All items less food and energy in U.S. city average, all urban consumers, not seasonally adjusted.  Healthcare inflation data from BLS CPI table: Medical care in U.S. city average, all urban consumers, not seasonally adjusted.

Costs you may need to cover

Early in retirement, healthcare costs may be limited to premiums for a medical plan. But your needs might grow later, requiring you to find money for things like a chronic health issue, ongoing prescription needs, hospital stays or even assisted living.

How variable annuity income can help

People often focus on covering everyday expenses in retirement but may overlook strategies to address increasing expense like healthcare. Variable annuities allow you to invest in a variety of asset classes—transferring between them as needed—which could potentially increase your income over time.
How variable annuity income can help

Do you know what’s in your employer plan?

The good news is your employer may offer TIAA and CREF variable annuities that can strengthen your retirement income plan and address the needs and risks you may face in retirement.
Next Steps

How TIAA can help

Read more

Brush up on other healthcare considerations in retirement.

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1 Retirement Income Reference Book, LIMRA Secure Retirement Institute, 2015 
 
2 Society of Actuaries 2015 Risks and Process of Retirement Survey, Figure 65: Shocks Experienced During Retirement
 
This article is intended for informational and educational purposes only and should not be regarded as a recommendation or an offer to buy or sell any product or service to which the information may relate.  Certain products and services may not be available to all entities or persons.
 
Please note that TIAA is not responsible for the content or privacy policies of third-party sites that may be referenced in this article or to which you may link from this article. TIAA does not endorse or recommend the products, services, or information found on any third party site.
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