William Lako: Plan for health care costs to protect retirement savings

According to the Employee Benefit Research Institute, couples 65 and older will likely need between $212,000 and $383,000 to cover their health care costs in retirement. There are many variables to that amount, including available insurance plans, high prescription drug expenditures, and life expectancy. So how do investors even begin to plan for health care costs? Earmarking nearly $400,000 right out of the gate is a little extreme, if not nearly impossible, for most.

First, realize that retirement can last 20 to 30 years, so most investors are looking at roughly $11,900 a year for health care costs, including premiums, prescription drugs, and out-of-pocket costs. However, these figures do not factor in long-term care costs, which could be as high as $100,000 a year.

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