Avoiding the Retirement Medical Expense Surprise

The wildcard in every retirement plan is the cost of medical care. Medical expenses above estimates are the cause of many retirement plan failures. There are several reasons medical expenses disrupt so many plans:

• Many people are used to employer-paid medical care. Before they retire, they do not realize the full cost of medical insurance and often assume the employer coverage will continue.
• Employers used to provide medical coverage for retirees. Now, few do. As of 2010, only about 5% of companies with 500 or more employees offered at least some retiree medical coverage. Most that do offer retiree medical care reduced benefits in recent years, and smaller employers rarely offer retiree medical care.
• Life expectancy continues to increase, and medical expenses tend to rise with age.
• The cost of medical care is rising faster than general price inflation.
• Technology makes more conditions treatable but the treatment comes at a cost.
• The lifetime cost of medical care varies between individuals. Some have minimal expenses until a final illness; others develop chronic conditions and incur above average expenses for years.
• Retirement medical care is divided into two buckets: regular medical expenses and long-term health care.
• Medical care is not spread evenly over retirement. The expenses generally increase over time and bulge in the later years.

Estimating the cost of retirement medical care is difficult. Fidelity Investments has an annual survey that attempts to do that. A recent estimate is that the average married couple age 65 today will pay RM677,000 for medical care between ages 65 and 80.  For most couples, the expenses will average RM30,000 or more in the early years of retirement and be much higher in later years. Many people will live beyond 80, boosting lifetime costs. The Fidelity estimates are an average, so half of retirees will have higher costs.


In 2008 for the first time Fidelity also estimated the cost of long-term care for the average 65-year-old couple. The couple will jointly spend RM255,000 over their lifetimes on long-term care. This is in addition to the other estimated retirement medical expenses.


Remember that these are average expenses. Some will spend less; others will spend more.


For a couple retiring at 65 today, a fund of about RM623,000 is needed just to fund the medical expenses through 85 (not including the long-term care).


Clearly retirement medical expenses are an important part of the retirement plan, and they also one of the most neglected or mishandled. Here is what pre-retirees and those in the early years of retirement should do to properly plan for retirement medical expenses.


So, what you should do now? Is it a good choice by wait until you are diagnosed a sickness and empty your retirement saving? NO! The cost of retirement medical care is a shock to many retirees. You should prepare early! Get well prepared by owning a ING Cashless Medical Card. ING Medical Card will serve for youand pay all your hospital bills when you are admitted. Do you think is a good choice when someone (ING) pay your medical bills and your retirement fund are still available for your personal use?

Contact me to enquire about ING Cashless Medical Card at :

Anuradha .R

+6 (012) 634 9414

engineer2207@gmail.com