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July 09, 2007

Medical expenses can shatter security

Retirement for Ellen Warwick isn't shaping up as she had planned. Warwick, 62, and her husband, 72, quit their jobs in California three years ago and moved to Noblesville. They thought they'd travel when they weren't spending time with their two grandchildren in Indiana.

Instead, they allocate much of their money to health care.
"We do travel some," Warwick said. "But I had dreams and thoughts about going to Europe and traveling around the world, but we have to be careful.

Health-care expenses may stand in the way of a carefree retirement for many baby boomers, too. More than half of the people surveyed for The Star's poll cited coping with the rising cost of health care as a major worry for how they will weather retirement.
There's no secret to the best way to handle this dilemma. As with other areas of retirement planning, the answer, experts say, is to save, save, save.

The average 65-year-old couple retiring this year will need about $215,000 to cover medical costs, according to Fidelity Investments.
People should not expect Medicare to meet all their needs. Studies show that in the last two years of life, people spend an average of $11,000 out of pocket, said Susan Chen, an assistant professor of health economics at Purdue University.

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Posted by healthinsurance at July 9, 2007 04:40 PM