Planning for retirement and health care costs: A guide for Beaufort County residents
In Beaufort County, 30% of the population is 65 years old and older. This age range often faces unique financial challenges, especially in terms of health care.
According to the Centers for Disease Control (CDC), life expectancy has continued to rise, and while it certainly is a good thing to live a long life, practicalities like health care costs can stand in the way of enjoying your golden years.
What are common health concerns for those 65 and up?
While many are living longer, fewer are living those years in good health, with chronic illness as one of the top contributors to health concerns and complications, according to the CDC.
This juxtaposition of living a longer life but in poorer health is often called a shrinkage of “health span.”
A health span is the number of years older people spend in fundamentally good health. But the longer you spend in bad health, the more serious the financial implications, making it critical to plan for healthcare costs in retirement.
For many residents in Beaufort County, it is not uncommon to travel longer distances to larger cities like Savannah and Charleston for major medical treatments or even just a simple check-up.
Other costs like home safety, at-home care and more also add to the stack of costs retirees may anticipate.
But how much do retirees pay for their health care and what can they do to stay smart with their money?
Here are some tips and guidance from financial experts with Revolutionary Financial Group and medical professionals in Beaufort County to help retirees so they don’t outlive their savings.
Understanding longevity and health span in retirement
For retirees in Beaufort County, chronic conditions like diabetes, cardiovascular diseases, dementia and cancer are the most commonly seen health care concerns, according to local financial experts with Revolutionary Financial Group.
According to the CDC, the average person spends about 10 years with chronic ailments like diabetes, cancer and cardiovascular issues.
These kinds of health concerns require ongoing care and incur significant costs.
The CDC states that chronic diseases are the primary contributors to the nearly $4.5 trillion Americans spend annually on healthcare.
According to Fidelity Investment’s 2024 retiree healthcare cost analysis, the average 65-year-old retiree will spend $165,000 on out-of-pocket health care in retirement, up 5% from the previous year.
But in all actuality, some retirees may be spending up to $315,000 a year on their healthcare costs, according to the National Council on Aging.
This added spending often leads retirees to dip into their savings sooner than they want or claiming Social Security earlier than expected.
Planning for rising healthcare costs in Beaufort County
The cost of healthcare in retirement will vary from person to person based on your medical needs, but even relatively healthy people could have to pay large medical expenses during retirement.
For residents of Beaufort County, planning ahead is essential to mitigate the financial strain these health care costs can cause. Without proper preparation, retirees could end up draining their savings to cover these expenses.
In Beaufort County, retirees need to consider several important steps to ensure they can cover rising healthcare costs and protect their retirement savings.
Here are some key tips to implement both before and during your retirement to get the most out of your money:
1. Plan early and for a long life
When planning for retirement, many people assume their savings only need to last 10 to 15 years. But with life expectancy rising, it’s important to plan for a much longer retirement.
Having enough saved up to meet healthcare needs in your later years will ensure that you don’t outlive your savings.
2. Create multiple income streams
Try to find multiple income sources to support your retirement because relying solely on Social Security and savings might not be enough.
Experts recommend that retirees consider using the following:
Annuities
Bonds
Real estate
These all can help supplement income and provide a steady cash flow to help cover the increased costs of healthcare.
3. Consider long-term care insurance
Long-term care is different from medicare services. Long-term care services may include help with daily activities, home health care, respite care, hospice care, adult day care, care in a nursing home or care in an assisted living facility. Insurance is crucial for covering these expenses that Medicare doesn’t.
Medicare only covers 100 consecutive days in a long-term care facility, which means if you don’t have or can’t get long-term care insurance, you might have to pay those costs out-of-pocket.
In South Carolina, a private room in a nursing home can cost upwards of $10,081 per month, making long-term care insurance a worthwhile investment to cover these costs. People 65 years old today have a 70% chance of needing long-term care in the future, according to the National Council on Aging.
Without it, families are often forced to use retirement savings to pay for long-term care, which can quickly drain savings. While some employers offer long-term care insurance in their benefits package, not all do, making it important to plan to purchase one through an insurance agent or other financial professional.
The South Carolina Department of Insurance offers additional guidance for South Carolina residents seeking different avenues of coverage for long-term care. Click here to learn more.
4. Maximize Health Savings Accounts (HSAs)
Health Savings Accounts (HSA) are a great way to save for medical expenses while reducing your taxable income. An HSA is a type of personal savings account you can set up to pay certain health care costs. It allows you to put money away and withdraw it (tax-free) as long as you use it for qualified medical expenses. These include things like deductibles, co-payments, coinsurance, and more.
If you have a high-deductible insurance plan, you can open an HSA, which lets you contribute pre-tax dollars, grow your savings tax-free and withdraw funds for qualified medical expenses. This lets you continue growing your account year after year.
These funds can be used to cover out-of-pocket medical expenses and premiums when you enroll in Medicare.
One important note about HSA accounts: you cannot contribute to an account once you enroll in Medicare, but you can still use the funds to cover out-of-pocket medical expenses and premiums.
For more information about HSA accounts, click here.
5. Don’t overlook prevention
The upkeep of your mental, social and physical health is one of the best ways to maintain your health and prevent common chronic illnesses.
Practical things like regular exercise, a healthy diet and routine medical check-ups can help you avoid major health care costs.
Financial experts with the Revolutionary Financial Group state, “Treating health expenses as an investment in your future is a crucial strategy for prolonging your health span and avoiding the costs of treating long-term diseases.”
Social isolation, depression, and mental health issues are often overlooked but can impact both well-being and finances.
The healthcare landscape in Beaufort County
In Beaufort County, retirees have access to healthcare services from both local and regional providers.
However, given the rising demand for healthcare services, especially as the county’s population ages and continues to grow, it’s important to consider whether local health facilities are meeting their needs. For certain procedures and surgeries, it is not uncommon for retirees to look beyond Beaufort County, considering facilities in Charleston or Savannah.
While more healthcare facilities are in the works, it’s important to consider what your care options are based on your needs.
How to protect your future financially
If you want to take your savings plan a step further, it is commonly recommended for retirees to create an income distribution plan where the assets you collect can be used to help pay for your retirement (often referred to as the accumulation and distribution of funds).
It can be difficult to understand the ins and outs of withdrawing funds from retirement accounts, so having a clear strategy for how to manage distributions can ensure that your funds last throughout retirement.
Key takeaways for Beaufort County residents
Healthcare costs will rise: Healthcare expenses will likely increase as you age, particularly if you develop chronic conditions, so plan early.
Diversify your income: Having multiple streams of income in retirement will provide financial stability and help you cover rising healthcare costs.
Plan for long-term care: Nursing home care and in-home assistance can be costly. Long-term care insurance can help alleviate these financial burdens.
Use available savings tools: Take advantage of Health Savings Accounts and other tax-advantaged savings tools to prepare for medical costs in retirement.
Preventative care is crucial: Investing in your health through regular exercise, healthy eating and socialization can help avoid chronic conditions that could drain your finances later on.
This story was originally published February 20, 2025 at 6:00 AM.
