Retirement expenses: Supplementing social security and medicare
Social Security and Medicare can provide a good foundation for your retirement—but they won’t take care of all your financial needs.1
You may need 85% of your pre-retirement income to maintain your current standard of living while in retirement. Considering that Social Security benefits will likely provide only a portion of your income, you'll need other sources to make up the rest.2
And while Medicare covers some of the cost of healthcare, you're still responsible for the remainder. Expenses not covered by Medicare include:
- Vision and dental care
- Long-term care
These types of out-of-pocket healthcare expenses could be substantial. Fortunately, you have time before retirement to plan and start making up any shortfall. For instance, you might consider increasing your retirement contributions, opening a health savings account (HSA), if you have access, or purchasing long-term care insurance.
A financial professional with Principal® can help you determine which options may be right for you, so you can feel confident about heading into retirement more prepared for expenses that may come your way.
1 Social security and Medicare benefits based on career employment earnings.
2 Aon Consulting's 2008 Replacement Ratio StudyTM www.aon.com/about-aon/intellectual-capital/attachments/human-capital-consulting/RRstudy070308.pdf. Morningstar–Estimating the True Cost of Retirement (2013).