What healthcare costs should I consider in retirement?
Healthcare is one of the largest and most unpredictable expenses in retirement. Many retirees are surprised by how much they'll need to cover insurance premiums, prescriptions, and long-term care.
Since healthcare costs increase as you age, it's crucial to have a plan. Below, we'll cover the healthcare costs you'll likely encounter in your 60s, 70s, 80s, and beyond, along with practical tips to help you manage expenses.
Healthcare in your 60s:
Getting started with Medicare and staying healthy
It's great if you’re able to stay healthy and active in your early retirement years. You can use the time to get serious about setting up a solid healthcare plan.
Medicare basics
When you turn 65 (or earlier if you have
- Part A is hospital insurance. It covers hospital stays, skilled nursing facility care, hospice care and some healthcare.
- Part B covers outpatient care, certain doctors’ services, medical supplies and preventive services.
- Part C (Medicare Advantage Plan) is a type of Medicare-approved health plan from a private company that you can choose to cover most of your Part A and Part B benefits instead of Medicare parts A and B.
- Part D is prescription drug coverage. This is extra coverage that people with Medicare can choose to help with the cost prescription drugs.
Visit
Consider Medigap or Medicare Advantage
Medicare doesn't cover everything, so many retirees choose either Medigap or a Medicare Advantage plan to cover costs like deductibles and copays. Medicare Advantage often includes extras like dental or vision, which can be a big plus.
Visit
Purchase travel insurance for medical emergencies abroad
Many retirees are active and mobile and enjoy traveling during this stage of retirement. However, it's important to remember that Medicare generally doesn't cover health services outside the U.S. Having travel insurance can cover medical emergencies abroad and provide peace of mind during trips.
Tips
- If you're planning to enroll in Medicare, consider enrolling as soon as you're eligible to avoid late penalties, which can make premiums more costly over time. Visit
https://www.medicare.gov/ to enroll. - Compare Medigap and Medicare Advantage to see which fits your health needs and budget best. As your healthcare needs can change, revisit this choice every few years. Visit
https://www.medicare.gov/ to see which option might be best for you. - When planning a trip, shop around for travel insurance that includes comprehensive medical coverage.
It's great if you're able to stay healthy and active in your early retirement years. You can use the time to get serious about setting up a solid healthcare plan.
Healthcare in your 70s:
Managing medical needs and prescriptions
In your 70s, many retirees head to the doctor more frequently and need regular prescriptions. Here's what to expect in this decade:
Rising Medicare and Medigap premiums
Premiums for Medicare and Medigap can increase in your 70s, especially if your income rises or you require more services. Monitoring these costs and adjusting your plan as needed can help you manage expenses.
Increasing prescription drug costs
Prescription needs often increase during this stage, as many people take medication for chronic conditions. If you have Medicare Part D, remember that you may encounter a "coverage gap" or "donut hole," where you pay more out-of-pocket for prescriptions.
Planning for mobility aids
If you need mobility aids, like walkers or stairlifts, Medicare covers all or a portion of these under Part B if deemed medically necessary.
Tips
- Compare Medigap plans or Medicare Advantage options each year to ensure you get the best deal for your coverage needs. To find a deal that meets your unique needs visit
https://www.medicare.gov/ . - Review your Part D plan annually, as plan costs and coverage can vary yearly. Look for a plan that covers your medications at the lowest price.
- Start researching long-term care options. Planning early can help you understand costs, coverage options, and the type of care that best suits your needs, so you’re prepared if and when the time comes.
Healthcare in your 80s and beyond
Addressing long-term care and advanced medical needs
Healthcare needs can grow significantly in one's 80s. This is often when long-term care and managing costs for more frequent medical treatments can become a reality.
Long-term care needs
By your 80s, you may require assistance with daily tasks, which Medicare generally does not cover. Long-term care insurance can help with the cost of nursing home care or in-home aides. Planning for long-term care early, ideally in your 50s or 60s, can save money in the long run.
Higher Medicare and Medigap costs
By this age, Medicare and Medigap premiums will likely increase, and you may need more specialized care. Medigap can still be valuable for covering these extra costs.
Home health and hospice care
If you prefer to stay in your home rather than moving to a facility, Medicare can cover some home health services, but only if they're deemed medically necessary. Hospice care is also covered for terminally ill patients.
Tips
- If you can afford it, consider purchasing long-term care insurance well before you need it. Premiums are lower when you're younger and healthier.
- To avoid nasty surprises, try setting aside extra funds for healthcare or consider adjusting your coverage if your medical needs increase.
- Research local home care services early, even if you don't need them yet. Knowing your options can ease stress later.
Tips to help manage healthcare costs throughout retirement
Create a healthcare savings account (HSA)
Create a healthcare savings account (HSA) if you're still working and have a high-deductible health plan. Contributions to an HSA are tax-free and can be used for medical expenses later.
Review your coverage each year
Review your coverage each year. Medicare plans change annually, so compare your options to ensure you get the best plan for your budget and healthcare needs.
Plan for inflation
Plan for inflation. Healthcare costs often increase with inflation, so build this factor into your retirement savings plan.
Keep up with preventive care
Keep up with preventive care. Medicare covers many preventive services, which can help you catch health issues early and avoid bigger bills.
Planning for a healthy, financially stable retirement
The reality of healthcare expenses in retirement can be intimidating, but planning makes it easier to manage. By setting up a comprehensive healthcare plan, reviewing your options yearly, and preparing for rising costs, you'll be better equipped to handle expenses and enjoy peace of mind through each retirement stage.
Get help at no additional cost

Meet with a financial professional
Need more one-on-one support to plan your retirement? Meet in-person or virtually; flexible dates and times are available.

Looking for Account support
If you need to update your account details or complete a transaction, get help right away.
This material is for informational or educational purposes only and is not fiduciary investment advice, or a securities, investment strategy, or insurance product recommendation. This material does not consider an individual’s own objectives or circumstances which should be the basis of any investment decision.
Investment products may be subject to market and other risk factors. See the applicable product literature or visit TIAA.org for details.
Retirement check refers to the annuity income received in retirement. Guarantees of fixed monthly payments are only associated with TIAA's fixed annuities.
Investment decisions should be made based on the investor's own objectives and circumstances. Advice is obtained using an advice methodology from an independent third-party.
4346260