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Retirement & Planning
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Health Care Costs in Retirement

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Questions?

Call us at 888-213-4695 or visit your local branch.

After years of planning and saving for retirement, the last thing you want is for unexpected medical bills to undo your hard work. Estimating your potential health care costs during retirement can help you plan properly for your future.


Estimating your health care costs in retirement depends on several key variables:

  • How much health care will you need?
  • How long will you need it?
  • Will your savings and investments provide you with enough return to pay for it?

Having enough savings to cover your health care in retirement could be a challenge; you might prefer to pay your health care premiums using your retirement cash flows or investment returns. But keep in mind that investment returns fluctuate, so it’s a good idea to have cash reserves or liquid assets to cover costs.

What you can do now:

We estimate that health care costs will have an inflation rate of 8% (roughly triple the projected Consumer Price Index). However, if your money is invested in a moderate portfolio, you might expect your portfolio to grow at around 6.3% per year on average over the long term.

The three scenarios below assume varying rates of return and lengths of retirement; the lump sums are what you'd want to have saved at the start of your retirement.

  Scenario 1 Scenario 2 Scenario 3
First-year costs

$10,000

$10,000

$10,000

Assumed health care inflation rate

8%

8%

8%

Assumed rate of return

5%

5%

4.2%

Time horizon

30 years

25 years

30 years

Lump sum required1

$465,000

$358,000

$570,000


Ready to get started with Schwab?

Call 888-213-4695.

Already a Schwab client?

Call 888-539-4888 to speak with an insurance specialist.

Contact your Financial Consultant or call us anytime at
888-213-4695.