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business Thursday 31 March 2022
4 big expenses you could face in retirement

By KATE ASHFORD of Nerd- Medicare Part D have had
Wallet drug costs high enough to
Retirement planning is exceed the catastrophic
part savings, part guessing coverage threshold, which
game. While many of your is $7,050 in 2022. If you have
day-to-day expenses will a condition that requires
remain the same, there are specialty tier drugs — such
big-ticket categories that as cancer, multiple sclerosis
can take a large bite out of or hepatitis C — your out-
your savings. The more you of-pocket costs can be ex-
can plan, the better pre- ceptionally high. Once you
pared you'll be to weather hit the catastrophic thresh-
the costs. old, you'll pay either a small
Here are four expenses to coinsurance or copay for
keep in mind as you pre- drugs , but there's no cap
pare for retirement: on out-of-pocket spending
1. HEALTH CARE under Medicare Part D; it
The average 65-year-old can add up if your drug is
retired couple will need expensive.
about $300,000 in after-tax "My dad has rheumatoid
savings to handle health arthritis, and his drugs cost
care costs in retirement, $6,000 per month," says Tess
according to a 2021 re- Zigo, a CFP in Palm Har-
port from Fidelity. Fidel- In this June 15, 2018, file photo, cash is fanned out from a wallet in North Andover, Mass. bor, Florida. "What retiree
ity is a NerdWallet partner. Associated Press has $6,000 a month just for
"And that's just for regular drugs?"
health care," says Michelle Part B monthly premiums. you only need a few hours 5 Medicare beneficiaries WHAT TO DO
Gessner, a certified finan- In 2022, the standard pre- of care per week," says Pat- spent more than $1,000. A financial planner special-
cial planner in Houston. mium costs about $4,000 a ti Black, a CFP in Birming- Original Medicare doesn't izing in retirement needs
"That's not even counting year for a couple. ham, Alabama. "That math cover most traditional den- can stress test your finan-
unexpected chronic illness "It really creeps up," says becomes unworkable, the tal care, and 47% of Medi- cial plan for health events
care." Laurie Burkhardt , a CFP in more care you need." care beneficiaries go with- and other expenses. If
Your specific costs will de- Boston. "And it's easy, be- Certified financial plan- out any dental insurance. there are gaps in your cov-
pend on where you live, lieve it or not, to get to that ners can help clients proj- But gum disease, tooth erage, they can help you
how long you live and your income level when you are ect costs for a few years of loss and oral cancer are with strategies to address
overall health. Taking care at the age where you're long-term care to ensure all greater concerns for se- unexpected costs, such as
of your health and ade- taking required distributions their savings can handle niors, and finding compre- considering long-term care
quately managing condi- from your IRA." it. "I talk with clients about hensive dental insurance insurance or a hybrid policy
tions like Type 2 diabetes 2. LONG-TERM CARE whether long-term care in- can be difficult. that combines life insur-
can help keep costs lower. Seniors who live to 80 have surance should be part of "Dental procedures can be ance with a long-term care
The other health care sur- about a 1-in-4 chance of their financial plan to trans- a really rude awakening," rider.
prise is that Medicare pre- needing long-term care. fer some or all of this risk," Burkhardt says. "I'm going Getting the right insurance,
miums are higher if your And it's not cheap: An as- Black says. through it right now with my from Medicare Supplement
income is above a certain sisted living facility costs 3. DENTAL CARE husband, who is retired and plans to dental and drug
level. For example, if you're $4,500 a month, on aver- The average senior on is getting a dental implant. coverage, is also essential.
married filing jointly with a age. And while a home Medicare using dental He's been shocked at how "If the coverage is correct,
modified adjusted gross health aide averages services paid nearly $900 much the out of pocket is." then those catastrophic ex-
income over $182,000 in about $27 per hour, the a year out of pocket, ac- 4. PRESCRIPTION DRUGS penses aren't so bad," says
2020, you'll pay at least 40% costs add up. cording to the Kaiser Fam- Since 2015, at least 1 mil- Dennis Nolte, a CFP in Win-
more for your Medicare "That's pretty reasonable if ily Foundation. And 1 in lion enrollees per year in ter Park, Florida.q

Waymo to expand autonomous vehicle rides to San Francisco

SAN FRANCISCO (AP) — tonomous rides to the pub- gram soon after. No date
Waymo's self-driving ride- lic in San Francisco. The was given for when the hu-
hailing service is branching company has been us- mans would be pulled from
out to San Francisco. ing autonomous minivans the vehicles.
The autonomous vehicle without human backups to The testing in San Francis-
unit of Alphabet, Google's carry passengers in the East co comes as competitor
parent company, said Valley of the Phoenix metro Cruise LLC, a General Mo-
Wednesday that it start- area since 2020. tors subsidiary, is seeking a
ed carrying employees in Waymo also announced permit to charge for fully
electric Jaguar I-Pace SUVs Wednesday that soon it autonomous rides in the
without human backup will expand driverless rides city. Cruise is operating a
drivers. Previously the com- to Downtown Phoenix. The small fleet of autonomous
pany had been testing the program will start by carry- vehicles that it opened to
vehicles with a safety driver ing Waymo employees with the general public at the
behind the wheel just in safety drivers in the vehi- beginning of February. GM
case. cles, with a goal of opening expects to get a permit to In this April 7, 2021 file photo, a Waymo minivan arrives to pick
Waymo didn't elaborate those rides to residents who charge passengers for au- up passengers for an autonomous vehicle ride, in Mesa, Ariz.
on when it might offer au- join a "trusted tester" pro- tonomous rides this year.q Associated Press