At 64 with $630,000 saved, your retirement nest egg looks solid — but will it hold up against rising health care costs? Social Security can provide support, but medical expenses could still disrupt your plans.
Important Points
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Maintaining your physical health becomes even more crucial as you age, along with securing reliable insurance. Medicare provides coverage starting at 65, but its future under the Trump Administration may raise concerns.
How Could President Trump Change Medicare?
With President Trump officially back in the spotlight, his administration may face Medicare’s mounting challenges.
Medicare costs are rising rapidly, projected to double from $900 billion in 2022 to $1.8 trillion by 2031. The Medicare trust fund could also run out as early as 2031, threatening its ability to meet future obligations.
Trump’s 2024 platform promises to “fight for and protect” Medicare without cuts, but Congress ultimately shapes legislation. A Republican-led Congress might explore reforms like:
- Covering costs for using smartphone apps to manage certain conditions
- Implementing site-neutral payment policies to equalize hospital and provider fees
- Offering tax credits to support family caregivers
- Expanding Medicare provider networks
- Reducing regulations to encourage market-driven pricing
- Leveraging AI to lower healthcare costs
- Promoting Medicare Advantage plans for seniors
These proposals aim to control costs and expand options without cutting benefits, potentially lowering service expenses and enhancing care choices for beneficiaries.
The Department of Government Efficiency may advocate for spending cuts to curb wasteful expenditures. However, with a razor-thin Republican majority in the House of Representatives, significant reductions to Medicare are unlikely.
How to Plan for Health Care Costs in Retirement
Preparing for health care costs is a key aspect of retirement planning, regardless of potential Medicare changes.
According to Fidelity, the average 65-year-old retiree will need about $165,000 to cover health care expenses in retirement — a significant portion of your $630,000 savings. If Medicare benefits are scaled back, this amount could rise even further.
If you’re 64, time is short to strengthen your financial preparedness. Here’s how you can take action:
- Review Medicare Advantage and Medigap plans to ensure you have comprehensive coverage.
- If you’re still employed, contribute to a health savings account (HSA), if eligible.
- Set a budget for medical expenses and maintain an emergency fund.
For younger Americans, prioritizing a larger retirement fund — ideally with an HSA — is essential. With future changes to Medicare more likely, proactive saving is crucial to bridge potential coverage gaps.
I’m 49 years old and have nothing saved for retirement
If you’ve waited until your 50s to start planning for retirement, you’re not alone.
A recent AARP survey found that 20% of Americans aged 50 and older have no retirement savings. Meanwhile, a 2024 Northwestern Mutual study shows that the average American estimates they’ll need $1.46 million for a comfortable retirement.
Even if you’re behind on your retirement goals, there’s still time to catch up. Here are four strategies to get back on track quickly.
Automatically Invest Your Spare Change
You don’t need to make large contributions to start working toward your retirement goals. Even setting aside $10 a week can add up — especially when you use your spare change wisely.
With Acorns, every time you make a purchase with your debit or credit card, the amount is rounded up to the nearest dollar. The difference — the spare change you’d usually leave behind — is then invested into a smart portfolio.
For example, if you buy a doughnut for $2.30, Acorns will round it up to $3.00 and invest the 70-cent difference for you. That might not seem like much, but $2.50 in daily round-ups can add up to $900 a year — before your savings even start earning returns in the market.
Maximize Your Current Savings
According to a survey by CNBC Select and Dynata Banking Behaviors, 57% of Americans keep their money in traditional savings accounts, which offer an average interest rate of just 0.46%.
You can easily earn over ten times that rate by switching to a certificate of deposit (CD). A CD is a low-risk savings option that offers a fixed interest rate for a set term, rewarding you with a higher return for your commitment.
With SavingsAccounts.com, you can compare top CD rates from banks nationwide. Their database features daily updates and personalized recommendations based on your risk tolerance and time frame, helping you find the best CD to meet your retirement goals.