Retirement has gone from being one of the most rewarding times in life to one of the most uncertain and stressful. Until now, retirement in the US has depended on Social Security, but it seems that this certainty is beginning to falter. The problem no longer lies solely in concerns about whether Social Security will continue to exist, bearing the weight of an aging population, but rather in the costs of medical care associated with retirement.
The main problem lies in the costs of the care needed after a certain age. Medicare, provided by the Social Security Administration (SSA), which kicks in at age 65, does not cover all medical needs, so many depend on the purchasing power and savings of retirees. Did you know that according to GenWorth data from 2024, the average price of a nursing home room is nearly $128,000 per year and home care is $78,000? According to data from the U.S. Department of Health and Human Services, 70% of people who turn 65 today will need assistance throughout their lives.
Given this scenario, retirees need to prepare well in advance, and turning to a financial planner could be one option. According to Clayton Financial Solutions co-founder D’Andre Clayton, retirees should focus first on having a stable income. For her part, CPA Shalini Dharna emphasizes the value of keeping fixed costs low to help cope with unexpected expenses. Another suggestion from experts is to explore long-term care insurance or Medigap supplemental policies early on. According to experts, all is not lost. It is still possible to enjoy a dignified retirement as long as you plan well.
Retiring in the US
Enjoying a well-deserved and dignified retirement is becoming increasingly difficult in the United States. Increased life expectancy, the risk of longevity, and concerns about the Social Security Administration’s (SSA) ability to cope are creating a tense and uncertain environment. One of the main problems retirees face is medical costs. While it is true that people aged 65 and older have access to Medicare, it only covers hospital visits, doctor’s appointments, and some prescriptions.
ccording to the U.S. Department of Health and Human Services, 70% of people turning 65 today will need some form of long-term care during their lifetime, and Medicare offers very limited support. Genworth’s 2024 data showed that the average price of a room in a private nursing home is nearly $128,000 per year, while home care averages around $78,000. How is a retiree supposed to cope with such a large amount?
Take action
Experts argue that the only way to deal with the challenges posed by retirement is through good planning. According to D’Andre Clayton, co-founder of Clayton Financial Solutions, “Retirement planning is not about hitting a number, it’s about building a plan that adjusts as your life changes.” He recommends focusing on stable income, segmenting savings by time horizon, using conservative income assets, and investing the rest in long-term growth.
On the medical side, experts recommend considering long-term care insurance or Medigap supplemental policies early, ideally in your 50s or 60s, taking advantage of lower premiums and easier approval. For her part, CPA Shalini Dharna emphasizes the value of keeping fixed costs low. “Downsizing, taking advantage of senior discounts, and switching to energy-efficient appliances may not seem exciting,” she said, “but they are smart ways to stretch your income and make room for unexpected expenses”.
The time is now
According to experts, it is important to focus on what you can control. While it is true that the latest projections indicate that the program’s trust fund could be depleted by the mid-2030s, there is still a five-year window in which to take action. By setting a specific budget, accounting for rising medical costs, and diversifying your income, you can achieve a more peaceful retirement.