If Retirement Health Care Costs Look Scary, Try These Tactics

NEW YORK (MainStreet) — Planning for retirement is a gamble. You don't know how long you'll live, how well your investments will do or how high the cost of living will go. One of the biggest wild cards: health care costs.

The older you get, the more you're likely to spend on health care, because Medicare doesn't cover everything. So how do you plan for that?

A study by the Employee Benefit Research Institute shows that recurring health care costs for Medicare beneficiaries average $1,885 a year. If those expenses — visits to the doctor and dentist and routine prescriptions — grow at 2% a year, a person who will live to 90 will require $45,708 at 65 to pay for them.

But that's just part of the picture. Retirees also face harder-to-predict non-recurring expenses for such things as hospital and nursing home stays, outpatient surgery and home health care. For people aged 85 and over, a nursing home could cost an average of $24,185 for two years, or $66,600 for those near the high end of the expense spectrum.

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