Do not project healthcare spending in retirement using a 7% annual medical-inflation rate without a direct source and a clearly stated time period. Estimate from your actual budget, healthcare entitlements, insurance, and the level of care you may need.
Start with your actual spending
Use receipts and past records. Separate treatment, medicines, check-ups, transport, caregiving, and equipment, and distinguish recurring costs from one-time events.
Check benefits and coverage limits
Ask your healthcare provider and insurer for details about your entitlements. Check outpatient and inpatient limits, room charges, exclusions, pre-existing conditions, waiting periods, and renewal terms. Do not assume that every plan provides the same coverage.
Build more than one scenario
Estimate a baseline and higher-cost scenarios, stating the assumptions and the year they apply to. Review the plan each year or when your health or policy changes.
Official information
Related reading
- Planning healthcare costs after retirement
- Understanding health insurance terms
- Comparing senior-care options
About the referenced video: The linked Money Buffalo video discusses building financial strength before retirement. It does not provide healthcare cost estimates; the official and personal sources listed here are more relevant to this guide.