5 health care cost factors that can drain retirement savings

Missing the Medicare sign-up can cause a penalty

Even if people plan to delay receiving benefits because they're working, they
still need to sign up for Medicare three months before turning age 65. If they don't enroll in Medicare medical insurance or prescription drug coverage when first eligible, they may have to pay a late enrollment penalty for as long as they have coverage.

Inflation will increase lifetime health care out-of-pocket costs

The compounding effect of rising health care inflation means total lifetime
out-of-pocket costs for health care in retirement will be higher, projected
to be:

Health care costs include Medicare Parts B and D, Medicare Supplement Insurance Premiums, Dental Premiums and out-of-pocket expenses. Calculations assume that a healthy male and female will have life expectancies of 87 and 89 respectively, and will have a combined future modified adjusted gross income (MAGI) up to $176,000.

Many Americans may retire sooner than they expect

Mainly due to health reasons or job loss, 46 percent of retirees stop working earlier than they planned. That means they'll need to find a way to bridge the "income gap" created by the loss of wages they had planned on earning.

Longer lives, higher costs

About one out of every three 65-year-olds today will live until at least age 90, and one out of seven will live until at least age 95. Those additional years of health care could also mean additional expenses because of health care inflation bumping up the costs.

Long-term care is a reality for many Americans

Considering a traditional, healthy 65-year-old couple, it is 75 percent likely at least one of the individuals will require long-term care as they age — 44 percent likely for a male living to age 87 and 56 percent likely for a female living to age 89. With rising projected costs, paying for long-term care could have a significant impact on a retirement nest egg, especially in the event both people would need it.