Retirement Health Care

Healthcare is one of the most misunderstood aspects of retirement planning.  Companies and governments used to provide retirees with lifetime healthcare coverage at little or no cost, but that has changed over the last 20 plus years, and most retirees no longer have access to this benefit.  Medicare and Medicaid are now the healthcare options for most retirees, along with supplemental plans that cover those services that are not fully covered by Medicare and Medicaid.  Access to Medicaid is determined by assets and income, while the cost of Medicare is dependent on the income a retiree and/or their spouse make once retired.  This makes planning for healthcare a complicated process and one that should be started well in advance of an individual's actual retirement date.  In addition, the taxation of Medicare premiums, supplemental premiums and ancillary costs for dental, vision and out-of-pocket costs change once an individual is retired.  Most of these costs will be paid for with after-tax dollars and, without proper planning, can cost up to $100,000 or more in taxes.

What is Medicare and how does it work?

Medicare is national healthcare for individuals over the age of 65 and some individuals under 65 with certain illnesses.  Most people are eligible for Medicare at the beginning of the month they turn 65.  Medicare has 4 components:

Part A- Hospitalization coverage

Part B- Physician coverage

Part C- Medicare advantage plans

Part D- Prescription drug coverage

For most retiree's who have contributed to social security for 10 years or longer there is no premium cost for Part A.  In 2022, the base premium for Part B is $170.10 per month but can increase based on an individual or couples 2 years prior Modified Adjusted Gross Income (MAGI)  The tables below shows the premium costs for Part B and D for individuals with higher incomes.  This is known as IRMAA (Income Related Monthly Adjustment Amount).  The Part B premium can be up to 3 times as much or more depending on your income in retirement.  

Part B Premiums

Part D Premiums



Planning for Healthcare Costs without a Roadmap?

As we have shown above, healthcare in retirement is not free for most people and if you have saved it can be significantly more than your neighbor.'s Just like planning for a trip, having a roadmap that details projected healthcare costs in retirement is imperative in properly planning for retirement.  Through our partnership with Aivante Health, we are able to provide our clients with a detailed forecast that will break down projected future healthcare costs for Medicare along with supplemental coverage and dental and vision expenses.  A sample of the report can be found by clicking on this link.  In addition, you can find a sample case study for funding healthcare and long-term care costs using our 401(h) Mirror Plan by clicking on the link.  


Sample Healthcare Report

Sample 401(h) Mirror Plan



Frequently Asked Questions

Several factors may affect the cost of retirement health care coverage, including health status, amount employer subsidizes, retirement age, location, income in retirement, and Medicare supplemental plan choice. You may also pay more depending on your income in retirement.

If you retire past 65, you can enroll for Medicare. However, you can also choose other health care policies that you can fund from your HSAs. Your insurer and or Medicare will cover your medical expenses by paying the amount provided under their contracts. Contact us at Bespoke retirement advisors to help you plan your medical insurance cover on retirement.

The eligibility for Medicare depends on age in most cases and sometimes your health condition. However, most individuals are eligible the month they turn 65.

Client Centered

Retirement planning is essential in ensuring your comfort after reaching that age. However, this should include retirement health care plans. Illnesses and injuries can strain your financial resources, inducing stress to you or your family. There are various benefits of enrolling in one, as you can see from the benefits above. Don't navigate the process of finding good retirement health insurance coverage alone. At Bespoke Retirement Advisors, we can help. To avoid high healthcare costs in retirement, contact us today to go through your options.

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