Protect Your Lifestyle: How to Plan for Health Care in Retirement

Health is wealth, as the saying goes, and nowhere is this truer than in retirement. Without good health, your hard-earned retirement savings may go toward medical bills, treatments, and care rather than the travel you’ve envisioned. Fidelity Investments estimates a 65-year-old couple retiring in 2025 could face $345,000 (1) in lifetime health care costs. Preparing for these expenses requires a proactive approach focused on what you can control and informed decisions about insurance and long-term care. Here’s how to start.

Invest in Your Health Today

The foundation of managing health care costs in retirement starts with maintaining your health now. While you can’t control every aspect of aging, you can prioritize a balanced diet and regular exercise to reduce the likelihood of chronic conditions such as diabetes and heart disease. A diet rich in vegetables, lean proteins, and healthy fats may help prevent or delay costly medical issues.

Regular exercise, particularly strength training, supports mobility and independence, reducing the likelihood of expensive interventions later. The Centers for Disease Control notes that adults who stay physically active are less likely to develop many chronic diseases (2).

Consider investing in professional support to optimize your health. A concierge physician provides personalized care, catching potential issues early through tailored check-ups and preventive strategies. Similarly, a certified personal trainer can design strength and flexibility programs to help keep you active. These upfront investments can potentially help reduce future medical expenses and enhance your quality of life.

Choose Medicare Plans Wisely

Medicare serves as the backbone of health coverage for most retirees, but navigating your options takes careful consideration. Original Medicare (Parts A and B) covers hospital stays and doctor visits, but it doesn’t cover everything, leaving gaps for copays, deductibles, and prescriptions. You can fill these gaps with Medicare Supplement (Medigap) or Medicare Advantage plans, but the right choice depends on your health, preferred providers, and prescription needs.

Review your Medicare plan annually during the open enrollment period (October 15 to December 7). Plans and premiums change annually, and provider networks or prescription coverage may shift. For example, if your medications change, a once cost-effective Part D prescription drug plan might now leave you with high out-of-pocket costs.

In 2025, the Inflation Reduction Act caps Part D out-of-pocket costs at $2,000 annually, but you’ll still want a plan that minimizes your share. (3) Use tools such as Medicare.gov’s Plan Finder or consult a licensed insurance broker to compare options. Annual reviews help ensure your coverage aligns with your health and financial needs.

Plan for Long-Term Care

Long-term care often represents one of the biggest wildcard expenses in retirement. About 70% of people over 65 will need some form of long-term care, whether in-home assistance, assisted living, or a nursing home. (4) In 2025, the national median cost for a private nursing home room exceeded $10,000 per month. (5)

Deciding whether to purchase long-term care insurance is a critical step. Premiums vary by age, health, and desired benefits. (6) The decision whether to buy long-term care insurance should be made in context of your overall financial plan. If you opt out of insurance, consider earmarking specific accounts, such as a high-yield savings account or brokerage account, for future care costs.

Just as important is sharing your plan with your family. Create a detailed document that lists your primary doctors, medications, and medical conditions. Note where you store your advanced directive for health care and consider completing a supplemental document, such as Five Wishes, to outline your care preferences. This preparation helps ensure that your loved ones make informed decisions in a medical emergency and honor your wishes. Store documents securely yet accessibly, such as in a shared digital folder or with a trusted family member.

Be Proactive, Be Prepared

Health care costs in retirement are inevitable, but their financial impact doesn’t need to be. By investing in your health, choosing Medicare plans that fit your needs, and planning for long-term care, you can protect both your lifestyle and your legacy. Emergencies rarely arrive without notice. Being proactive now means you’re ready when they do. Start today, and your future self (and your loved ones) will thank you.

Sources:

1. https://newsroom.fidelity.com/pressreleases/fidelity-investments–releases-2025-retiree-health-care-cost-estimate–a-timely-reminder-for-all-gen/s/3c62e988-12e2-4dc8-afb4-f44b06c6d52e
2. https://odphp.health.gov/sites/default/files/2019-09/Physical_Activity_Guidelines_2nd_edition.pdf
3. https://aspe.hhs.gov/reports/impact-ira-2000-cap
4. https://acl.gov/ltc/basic-needs/how-much-care-will-you-need
5. https://www.carescout.com/cost-of-care
6. https://www.ncoa.org/article/how-much-does-long-term-care-insurance-cost-and-is-it-worth-it/

Patti B. Black Financial Advisor CFP®, CSA®

Patti is a contributor to numerous national media outlets. She has been a guest on Talk of Alabama, Grow Your Business and Grow Your Wealth podcast, and the Breaking Money Silence podcast.