But if you don't have enough money for a Lexus, you just don't buy one. Instead, maybe you buy a Camry. The same thing will happen for health care. If you don't have the funds to pay for it, then you will buy something lower, i.e., less of it.
As I said in my first post in this thread, "According to a March 2006 study by Fidelity Investments, a retired couple without employer-sponsored health insurance can expect to pay $200,000 for out-of-pocket health care costs like premiums and co- pays.
If you look at the Fidelity web page I referenced earlier, you will see that most of the cost is for the insurance premiums, deductibles, and co-pays. If the retiree is fortunate enough to have, e.g., a former employer paying the premiums, that might cut the cost in half, but still leaves whatever deductibles and co-pays are included in the plan.
People who don't have adequate savings will have to pay whatever health care costs they incur out of pensions, Social Security, and so forth. If you want to plan adequately, you can do so by allocating $215,000 out of your retirement portfolio for medical expenses. If you don't care about planning adequately, then don't allocate it. If you really don't care about planning adequately, don't even bother to accumulate it. If most people today haven't accumulated enough to pay their projected health care costs, that just shows their opinion about planning for their future, as we well know.
I don't understand this diagram at all.
While actual medical costs may be weighted toward end-of-life expenses, retirees on Medicare and a Medicare supplemental policy probably are pretty well protected against out-of-pocket costs. E.g., my father died of cancer in the mid-nineties, after chemotherapy, radiation therapy, and various hospitalizations. I wouldn't be surprised that his last year's medical bills were mid-five-figures, but his out-of-pocket expense was less than $2,000 for deductibles and co-pays.
Again, this is a planning issue. Failing to plan is planning to fail.
Dave
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