Usually our blog topics focus on Long Term Care Planning, however sometimes it can be important to look at the bigger picture.   Simply put, healthcare costs will be one of the largest INVOLUNTARY expenses Americans face during retirement.   Disregarding Long Term Care Planning for a moment, very few people truly understand how their retirement  income will correspond to their actual healthcare expenses.

According to the Social Security Administration, "the average monthly Social Security benefit for a retired worker was about $1,230 at the beginning of 2012", or roughly $14,000 per year.   However, before a retiree receives the Social Security benefits, Medicare premiums are automatically deducted from that benefit.  Currently, the basic cost of Medicare Part B coverage is currently $104.90 per month, plus Part D coverage for prescription drugs.  

Additionally, ignore the debate in Washington D.C. about "means testing" Medicare benefits; becaused it's already happening and most politicians are either uninformed or avoiding admitting this fact.

Now.....Consider the historical annual Cost of Living Adjustment for Social Security (approx. 2.1%) and the historical increase in Medicare premiums (approx. 7.5%), and you can easily understand how the typical retiree will see basic healthcare costs become an ever-increasing percentage of their budget.

With respect to Long-Term Care, Medicare offers little or no real coverage, a fact most Americans continue to ignore.  Since 70% of retirees will require some form of Long-Term Care, this is another aspect of retirement healthcare costs which should be addressed in a retirement or financial plan. 

This is the “short list” of topics you should address before beginning the process of implementing a Long-Term Care plan.