84: The Retirement Expense You Can't Afford to Ignore: Planning for Healthcare Costs

Take Back Retirement

“If you're looking at the costs of medical expenses over time, they've actually historically grown faster than regular inflation. Healthcare is expensive, and it goes up faster than the rest of your spending; don’t overlook it.”

Listen in as our hosts, Stephanie McCullough of Sofia Financial, and Kevin Gaines of American Financial Management Group tackle the critical yet often underestimated topic of healthcare costs in retirement. They uncover the harsh reality that healthcare expenses can become a significant financial burden if not properly accounted for in your retirement plan. Shedding light on the unpredictable nature of health and the associated costs, they stress the importance of being prepared for more than just your mortgage or grocery bills. They also debunk the common misconceptions around Medicare and long-term care.

Stephanie and Kevin explore the complexities of managing retirement funds with future taxes in mind. They highlight the strategies to mitigate the tax hit when withdrawing from IRAs and 401(k)s, and how these can impact your Medicare premiums through the Income-Related Monthly Adjustment Amount (IRMAA). Learn about the benefits of Roth conversions and how Health Savings Accounts (HSAs) and Roth accounts can be powerful tools in reducing your tax burden. They also discuss the 'widow penalty' in tax brackets and the need for strategic planning, especially when it comes to Social Security and the real rate of medical expense inflation. This episode is packed with insights to help you secure your financial health.

Key Topics:

• Healthcare Expenses in Retirement Planning (02:25)
• Medicare Costs and Supplemental Insurance (04:36)
• Income-Related Monthly Adjustment Amount (IRMAA) (06:58)
• Medical Expenses Planning for Retirement and Tax Implications (13:09)
• Spouses of Different Ages Who Want to Retire Simultaneously (17:46)
• Inherited IRAs, Tax Brackets, and the Widow Penalty (18:38)
• Inflation Rates and Medical Expenses (21:56)
• Wrap-Up (24:18)

Resources:

• Request to lower an Income-Related Monthly Adjustment Amount (IRMAA)
• Take Back Retirement Episode 21: Simplifying Medicare: What’s Important For You To Know with Susan Sloan
• Take Back Retirement Episode 62: What Women Need to Know About Longevity
• Take Back Retirement Episode 27: Health Savings Accounts (HSA’s): What Women Need to Know

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You can find the transcript and more information about this episode at www.takebackretirement.com.

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