Join Chip Richardson and ask questions about your Henrico 457 Retirement Plan in the Retirement Roundup Open Forum.
Creating a realistic budget for your post-work life is a critical part of a successful retirement strategy. According to one commonly used rule of thumb, we’ll need to replace roughly 70% of our working income in retirement to maintain a similar lifestyle. That means a person making the median annual 2020 income of $67,521 would need $47,265 of income each year of their retirement.1
Another factor to keep in mind as you plan your retirement budget is your future healthcare expenses. We all know healthcare needs tend to increase as we age. So, it’s important to understand and budget for how much you may need to cover healthcare costs in your retirement.
No one can predict how much care they’ll need in the future. Everyone’s healthcare needs are different — and healthcare costs are always changing. But to give you a rough idea, one analysis by the Employee Benefits Research Institute found that, in order to have a 50% chance of having enough to cover premiums and median prescription drug expenses in retirement, a 65-year-old man would need $73,000 in savings and a 65-year-old woman would need $95,000 in savings. 2 Another study found that a 65- year-old couple that retired in 2021 can expect to spend $300,000 on healthcare and medical expenses throughout retirement.3
When you think about your retirement budget, you probably focus on the things you want to do with the time you’ll have after a career of hard work. And you should. But it’s also important to keep in mind the other expenses you’ll face. Knowledge is power. And knowing healthcare costs may significantly impact your financial well-being in retirement can empower you to make better-informed decisions about your future.
1 Census.gov, “Income and Poverty in the United States: 2020,” 2021, census.gov/library/publications/2021/demo/p60-273.html.
2 EBRI.org, “A Bit of Good News During the Pandemic: Savings Medicare Beneficiaries Need for Health Expenses Decrease in 2020,” 2020, ebri.org/content/a-bit-of-good-news-during-the-pandemic-savings-medicarebeneficiaries-need-for-health-expenses-decrease-in-2020.
3 Investopedia.com, “How to Plan for Medical Expenses in Retirement,” 2021, investopedia.com/retirement/how-plan-medical-expenses-retirement/.
Getting an annual checkup pays off in more ways than one! If you enrolled in a voluntary benefit offered through Pierce Insurance, you can take advantage of the wellness incentives. All incentives are paid once per calendar year as a cash benefit directly to you. Contact Pierce Insurance to file your claim. Didn’t enroll in the spring? Meet with a benefit counselor or go online to pierceins.com/henrico during our fall open enrollment and choose the plan that’s right for you and your family.
- Wellness Benefit pays $60
- Refer to p. 14 of your benefit booklet for details
Critical Illness Insurance
- Health screening benefit pays $150
- Refer to p. 20 of your benefit booklet for details
Hospital Indemnity Insurance
- Health screening benefit pays $50
- Refer to p. 28 of your benefit booklet for details
- Annual Cancer Screening benefit paid based on the plan selected:
- Plan 1- $50
- Plan 2- $100
- Plan 3- $150
- Refer to p. 36 of your benefit booklet for details