Don’t Let These 7 Retirement Assumptions Wreck Your Nest Egg

Core Insights - The article emphasizes the importance of accurately planning for healthcare costs in retirement, highlighting that assumptions about longevity and health can significantly impact retirement savings [3][4][5]. Healthcare Costs - A 65-year-old male retiring in 2024 with a Medicare Advantage Part D (MAPD) plan is projected to spend $128,000 on healthcare in his remaining lifetime [2]. - For a couple aged 65, the total projected healthcare costs under Original Medicare with Medigap plus Part D is $601,000, with $281,000 for a male and $320,000 for a female [1]. Retirement Planning Assumptions - The article outlines several dangerous assumptions that retirees often make, which can lead to financial shortfalls, including the belief that expenses will decrease post-retirement and that market returns will remain consistent [5][7][8]. - It warns against assuming low inflation rates will continue, as recent years have shown significant inflation increases, which should be factored into retirement projections [10][11]. Longevity and Health - The unpredictability of life expectancy is highlighted as a major variable in retirement planning, with the potential for long-term care needs to deplete savings faster than anticipated [4][6]. - Retirees are encouraged to plan for the possibility of living longer than average, which could require more substantial savings [3]. Employment in Retirement - Many retirees plan to work post-retirement to supplement their income, but this may not be feasible for everyone due to health issues, making it crucial to rely on savings and Social Security [12][13]. Inheritance Expectations - Relying on an inheritance to fund retirement is deemed risky, as it may not materialize due to various factors, including changes in the benefactor's financial situation [14][15].