Health Care for Celestial Bodies: The Insight from Venus Williams' Retirement Planning Experience
Retirement can be an exciting time, but it also comes with its own set of challenges, particularly when it comes to healthcare. One of the most pressing concerns for many retirees is securing health insurance after leaving a company's plan. This uncertainty often leaves many people feeling apprehensive.
If COBRA proves too expensive, retirees have other options. They can purchase insurance through the Affordable Care Act (ACA), provided they earn less than 400% of the federal poverty level. This means that even on a fixed income, subsidies may be available to help reduce monthly premiums.
Venus Williams, the oldest woman to win a WTA singles match since 2004, has emphasised the importance of retirement planning, specifically covering healthcare costs. For those retiring before the age of 65, options include state-subsidised insurance, COBRA, and private insurance, as stated by Derrick Longo, a wealth advisor at Exencial Wealth Advisors.
COBRA, however, requires workers to pay full price for their employer's health plan. If a spouse continues to work and has health insurance, enrolling in their employer's health plan is often the cheapest option for those without coverage.
Retirees typically have a 60-day window to enroll in a new health plan or move to a new state or coverage area. Healthcare in retirement can be expensive, even with Medicare at age 65. Fidelity Investments estimates that the average individual aged 65 enrolled in traditional Medicare will need approximately $165,000 in 2024 to cover out-of-pocket expenses, including co-payments, co-insurance, deductibles, doctor and hospital visits, prescription drugs, and Medicare premiums.
This amount represents a significant financial commitment and has increased by about 4% from previous years, reflecting rising health care costs in retirement. It's important to note that this estimate does not include major expenses such as dental and vision care, over-the-counter medications, medical equipment, or long-term care costs, which can be substantial and are incurred separately.
Long-term care costs can average from $20,000 to over $110,000 annually depending on the type and level of care, posing a significant additional financial risk. Fidelity’s updated 2025 estimate rose slightly to about $172,500, indicating ongoing increases in retirement health care costs.
In the contiguous United States, this equates to approximately $62,000 per year for a single person or $84,000 per year for a family of two. Regardless of the type of health insurance chosen, it's important to plan for coverage before retiring to avoid financial surprises.
In summary, retirees should consider planning for around $165,000 to $172,500 for basic health care expenses covered under Medicare but also anticipate additional savings for long-term care and other out-of-pocket health needs not included in this estimate. Venus Williams' return to tennis serves as a reminder of the importance of planning for retirement health care costs. Get quotes, be comfortable with the costs, and plan ahead to ensure a secure retirement.
During retirement, aside from Medicare and other basic health care expenses, it's crucial to factor in long-term care costs and additional out-of-pocket health needs, which may amount to an average of $20,000 to over $110,000 per year. Given the rising health care costs, it's advisable to plan for an estimated $165,000 to $172,500 for such expenditures before retiring. A proactive approach to retirement planning, as encouraged by Venus Williams, can help mitigate financial surprises regarding health-and-wellness, aging, and fitness-and-exercise related expenses.
