Trina Paul at Investopedia wrote about one of the most underestimated retirement expenses there is. Healthcare eats one in every six retirement dollars. Not a fringe case. The average.
Most pre-retirees I sit down with have budgeted carefully for housing, travel and taxes. Healthcare is the line item they have either skipped or wildly underestimated. The assumption is that Medicare handles it. Medicare helps. It does not protect you from everything. Part B premiums, deductibles, copays, prescriptions, dental, hearing aids, long-term care: none of it is free, and none of it stays flat.
The clients who retire without healthcare surprises did something specific years before they left work. They maxed their HSA while they were still earning, and let it grow rather than spending it on current copays. They built the healthcare number into their income projections as its own line rather than folding it into a general living-expense estimate. And they knew the number before they retired, including the gap years before 65 if they left early.
If you are within ten years of retirement and have not stress-tested your healthcare figure, that is the conversation to have now. A retirement plan that is missing one-sixth of its expenses is not a plan. It is a rough draft.
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