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Oct 21st, 2013

Health care costs cause worry and stress for nearly every one, but ultimately, which gender is more concerned?

Gender Gap

The results of a recent survey were documented in the Allsup Medicare Advisor Report, which highlights the differences between men and women when it comes to retirement planning.

Health care costs in retirement can add up quickly, and most people simply aren’t as prepared as they should be for the expense. Women in particular, though, are lagging in preparation due to a number of different reasons.

A recent study by Fidelity placed the average cost of health care expenses during retirement at approximately $220,000 for a 65-year-old couple who retires in 2013. This number may seem shockingly high, but the fact is, the cost of health care continues to increase and Medicare only covers certain services. The rest must be paid out of pocket.

Prepared to Pay

The survey was conducted over the phone with more than 1000 participants, all over the age of 65 who currently receive Medicare. When asked how confident they are about their retirement savings for health care, 70% of men expressed confidence that they have saved enough. In comparison, only 55% of women responded with the same answer, demonstrating a significant gap between the genders.

A variety of concerns make up this difference in retirement planning, but the main concern is simply the fact that women live longer, on average, than men. In the United States, a 65-year-old woman lives an average of two years longer than a 65-year-old man. Due to their longer life expectancies, women are also more likely to live alone for a longer period of time than most men.

On top of those added years of expenses, the majority of women rely on Social Security as their main source of income during retirement, according to the survey. This is in contrast to men, who had more savings options, like a pension and other investments, and were subsequently less worried about running out of money.

Women Fall Behind

Simply stated, women need to be putting more thought and planning into retirement than men, but the opposite is happening. Only 26% of women reported budgeting for health care costs during retirement, while 30% of men have done the same.

Not included in the $220,000 estimate of out-of-pocket health care costs during retirement, however, is the cost of long term care, something most people don’t begin to plan for until it is much too late. Because even just a year of care can total up to more than $80,000, including long term care expenses in your retirement portfolio may save you a lot of headache and financial strain down the road. Fortunately, you don’t have to budget the entire cost of care in order to prepare.

Long term care insurance provides a way to plan for the high cost of long term care without having to save hundreds of thousands of dollars that most people simply don’t have. Rather than pay $50,000 or $100,000 per year for care during retirement, you can pay a fraction of the cost, typically between $1,000 and $3,000 annually, in regular long term care insurance premiums when you are still working and earning an income. This makes it much easier to plan for the type of care that affects 1 in 2 Americans, and 70% of individuals over the age of 65.

If you have yet to consider the benefits of long term care insurance, read more about the risk of long term care and how to choose the right policy. Long term care insurance can help prepare you for retirement, letting you focus on other things besides scrambling to save money. Request a free comparison of the top long term care insurance companies today.

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