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If you and your partner are in your 60s and have $70,000 in savings, you don’t have a ton of money set aside for retirement. The good thing is, you do have Social Security, so if you have a $3,780 monthly benefit, you at least have some income you can count on.
Plus, some retirees even make it work with Social Security alone. In 2024, The Senior Citizens League found that 27% of seniors rely on Social Security for 100% of their income.
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Unfortunately, seniors face many big costs — and health care is often one of the biggest. Spending on medical care alone could take up a huge portion of your Social Security benefit, so it’s not a surprise you’re worried about how you can cover your care.
Fortunately, you may have some options available to you. Here’s what you need to know to try and ensure your retirement money lasts.
Health care spending is a huge burden on retirees
If you have a nest egg of $70,000, your savings will provide you with only around $2,800 in income per year. That’s because you’ll likely maintain a safe withdrawal rate to avoid emptying your accounts — and most experts say that means capping spending at around 4% of your account balance in year one and making annual adjustments for inflation.
When combined with your $3,780 per month Social Security benefit, you’ll have around $48,160 per year in income from your savings and Social Security.
Unfortunately, data from the Federal Reserve reveal average expenditures on health care among those 65 and over total more than $8,000 per year in 2023.
Fidelity also found a 65-year-old retiring in 2024 needs around $165,000 saved to cover all of their out-of-pocket costs throughout retirement. The cost is steeper if you end up needing long-term care. An average 65-year-old couple could spend upwards of $100,000 per year for long-term care, according to a report from RBC Wealth Management.
All of these numbers paint a troubling picture.
Opting for long-term care insurance could be rewarding, as it offers coverage for the costs of in-home assistance, nursing homes or assisted living facilities. This way, you don’t have to drain your financial resources or compromise on crucial healthcare decisions.
GoldenCare offers comprehensive long-term care insurance policies — including hybrid life or annuity with long-term care benefits, short-term care, extended care, home health care, assisted living, and traditional long-term care insurance.
Americans under the age of 65 can get a head start by purchasing health insurance right away, as premiums tend to become more expensive with age.
If you want to ensure your family isn’t hit with unexpected costs after your death, consider signing up for term life insurance from Ethos.
Ethos is rated “Excellent” on Trustpilot, and has an A+ rating from the Better Business Bureau (BBB). The platform offers simple and affordable coverage for a set period of time — typically between 10 and 30 years.
As a licensed third-party insurance administrator, Ethos has joined forces with some of the industry’s top insurance carriers, such as Banner Life, TruStage Financial and Ameritas Life Insurance.
Ethos gives you the flexibility to select coverage amounts ranging from $2,000 to $100,000. Premiums start at just $9.80 a month and are guaranteed throughout the term.
You can get coverage in just 10 minutes online or by phone, with no medical exams or blood tests required.
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How to cut costs and cover your medical care
The best way to preserve your nest egg is to do what you can to lower medical care costs so you can use your Social Security benefits and limited savings to pay for other necessities.
MedlinePlus suggests some of the following ways to do that:
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Shopping carefully for a Medicare Advantage or Medigap plan to reduce out-of-pocket costs associated with traditional Medicare. While you must pay premiums for these plans, it can be cheaper to buy them than to pay for all coinsurance costs and things Medicare doesn’t cover.
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Asking your care provider to switch to generic medicines to keep costs down.
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Getting routine health care screenings and focusing on preventative care to prevent small health problems from turning into major health issues.
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Seeking charity care at non-profit hospitals.
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Looking into financial assistance programs that help seniors cover medical and food costs and arrange transportation to doctor visits.
If you are unable to reduce your costs, you can also look at ways to increase your retirement income or cut other spending.
For instance, shopping around for car and home insurance policies can help you save money. According to a LendingTree survey of roughly 2,000 American consumers, 92% saved money when they switched their auto insurance providers.
By using a comparison platform like Insurify, you can instantly view quotes from top-rated providers to ensure you aren’t paying a hidden ‘loyalty tax’ to your current insurer.
Just answer a few basic questions, and Insurify will show you the most affordable deals in as little as 3 minutes.
Not only is the process 100% free, but you could also save up to 15% by bundling your car and home insurance.
For those looking to switch their home insurance carrier, OfficialHomeInsurance.com lets you compare rates from over 200 insurers near you and helps you find the best deals available in your area. You can save an average of $482 per year when you compare rates and select the lowest possible.
The best part? This process is entirely free and won’t impact your credit score.
Preparing for retirement
Retirement investing isn’t one-size-fits-all. For seasoned investors with portfolios of $50K or more, you might consider diversifying your nest egg through a flat-fee self-directed retirement account.
A self-directed retirement account is a tax-advantaged individual retirement account (IRA) that lets investors allocate funds to a significantly broader range of alternative assets than typical IRAs offered by banks or brokerage firms.
While traditional IRAs limit options to stocks, bonds and mutual funds, a self-directed account allows you to invest in real estate, cryptocurrency, private businesses, precious metals and private lending.
With IRA Financial, you can work directly with experienced retirement specialists. If you prefer making your investments online, their platform and mobile app makes it easy to manage your account. They also have an in-house tax team to ensure your investments stay fully compliant with IRS rules.
With over $5 billion in retirement assets under custody, guaranteed IRA audit protection, 25,000+ clients nationwide and a 97% client retention rate, IRA Financial can help you grow your retirement fund with alternative assets.
Simply answer a few questions — including the kinds of assets you would like to invest in and how much you’d like to start with — to prequalify for an account in just 90 seconds.
A financial advisor can also help crunch the numbers and build a retirement plan that works for you.
But hiring an advisor can be a lifelong commitment, which might make or break your retirement. That’s why finding reliable advisors is crucial.
That’s where Advisor.com can come in. The platform connects you with an expert near you for free.
Advisor.com does the heavy lifting for you, vetting advisors based on track record, client ratios and regulatory background. Plus, their network comprises fiduciaries, who are legally required to act in your best interests.
Just enter a few details about your finances and goals, and Advisor.com’s AI-powered matching tool will connect you with a qualified expert best suited for your needs based on your unique financial goals and preferences.
Finding the right advisor isn’t always easy — there’s no one-size-fits-all solution. That’s why Advisor.com lets you set up a free initial consultation, with no obligation to hire, to see if they’re the right fit for you.
Once you’ve got the right financial advisor in your corner, the next step is getting a clear picture of where your money’s actually going. That starts with the basics — budgeting and tracking your spending.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
