Is Healthcare Inflation Threatening Your Retirement Plan?

Rising healthcare costs are forcing many high-net-worth individuals to reevaluate their retirement plan strategies. Even if you have $500,000 or more in investable assets, you may wonder: Will healthcare eat away at the retirement assets I’ve worked so hard to accumulate?

One of the biggest threats today is the growing and often underestimated cost of healthcare in retirement, particularly in the latter years when there is a possibility for Assisted Living, Skilled Nursing, or Memory Care. In this article, we’ll explore everyday concerns, questions, and strategies to help protect your wealth against rampant healthcare inflation:

• “How much will I need for healthcare once I retire?”
• Should I switch financial advisors if healthcare isn’t part of the plan?
• What about long-term care? How can I plan for that without overspending?
• How can I preserve my retirement income if healthcare costs spike?
• Why the AIF® Designation Matters When Professionals Manage High-Net-Worth Retirement Plans

At Heritage Capital, we specialize in retirement planning for high-net-worth individuals. In that role, we help clients adapt to healthcare inflation, tax exposure, and shifting market conditions. 

How much should I budget for healthcare in retirement?

We often hear the question, “How much will I actually need for healthcare once I retire?”

Consider this. For a 65-year-old couple retiring today, average healthcare costs could exceed $300,000 throughout retirement. And that doesn’t include long-term care, which can add hundreds of thousands more, depending on need and location.

As a high-net-worth individual, your costs may be even higher, especially if you:

• Retire early before Medicare eligibility
• Want to access premium private care or concierge services
• Need to plan for a chronic illness or a family history of health issues
• Expect to support a spouse or loved one through long-term care
  

Financial tactics you can take today to offset potential healthcare inflationary impacts in the future include:

• Using real-time financial modeling to project healthcare costs based on your health, genetics, lifestyle, and location.
• Explore Health Savings Accounts (HSAs) while you’re still working; they’re one of the few triple tax-advantaged tools available.
• Work with a fee-only financial advisor in New Haven, CT, specializing in retirement and healthcare cost integration.

Are you concerned about the economy? Watch our founder, Paul Schatz, discuss his take on tariffs and the markets. 

Should I switch financial advisors if healthcare isn’t part of the plan?

Another common question we get is, “My advisor hasn’t brought up healthcare. Should I be concerned?”

If your current financial advisor isn’t incorporating future medical costs or long-term care into your financial projections, it may be time to consider switching financial advisors. Oversights like this can compound the impacts of these services down the road. 

Consider partnering with a financial advisor who:

• Uses comprehensive modeling to include inflation-adjusted healthcare costs
• Coordinates financial planning with tax, insurance, and estate professionals
• Holds a designation like AIF® (Accredited Investment Fiduciary®), signaling a commitment to acting in your financial best interests
  

At Heritage Capital, our team includes an AIF® professional who understands the fiduciary responsibility required to manage complex wealth. If your advisor isn’t acting as a fiduciary or proactive about rising healthcare costs, changing financial advisors may give you the clarity and coordination you need.

What about long-term care? How can I plan for that without overspending?

Have you ever thought: “Do I really need long-term care insurance?”

It’s a fair question, especially when you have significant assets. But long-term care isn’t just about insurance; it’s about protecting your wealth from a financial shock late in life.

Consider these facts:

• Over 70% of people over age 65 will need some type of long-term care.
• In Connecticut, the average cost of a private nursing home room exceeds $170,000 per year.
• Medicare doesn’t cover most long-term care expenses.

While long-term care insurance isn’t for everyone, let’s look at its pros and cons for a better understanding to see if it’s right for you: 

Pros:

• Helps cover the high cost of nursing homes, assisted living, or in-home care
• Protects your retirement savings from being depleted by extended care needs
• Offers peace of mind for you and your family, knowing care expenses are planned for

Cons:

• Premiums can be expensive, especially if purchased later in life
• Policies may have restrictions on the type or duration of care covered
• If you never need long-term care, you may not receive any benefit from the policy

This is where a New Haven financial advisor can help you evaluate whether long-term care insurance fits your needs or if alternative strategies make more sense for your situation.

How can I preserve my retirement income if healthcare costs spike?

Given the impact of inflation over the past several years, many people ask: “What if healthcare costs rise faster than expected?” This has been happening for decades.

This is where a dynamic, flexible retirement plan becomes crucial. Static retirement projections that assume 3% inflation won’t cut it in today’s market. The best retirement plans account for different types of volatility, not just in the securities markets, but also in expense categories like healthcare.

At Heritage Capital, we focus on building tax-efficient withdrawal strategies to ensure you have access to the cash you need without creating unnecessary tax burdens. By being strategic about when and how you draw from different accounts, we can help you preserve more of your wealth over time.

In addition, we integrate Medicare planning, Social Security timing, and asset location strategies to help optimize your retirement income and reduce surprises in your later years. These elements all work together to form a coordinated and personalized plan.

Perhaps most importantly, we will work closely with you to adjust your plan as your lives unfold. Whether you’re dealing with a new health diagnosis, losing a spouse, or simply shifting your personal goals, we believe your financial strategy should adapt with you, and not stay frozen in time.

Why the AIF® Designation Matters When Managing High-Net-Worth Retirement Plans

With so many financial advisors out there, it can be tough to know who to trust with your long-term planning. Designations matter, especially the Accredited Investment Fiduciary® (AIF®) credential.

An AIF® professional is trained to:

• Act solely in the client’s best interest
• Follow a prudent process when managing investments
• Monitor fiduciary responsibility across all aspects of wealth management
  

At Heritage Capital, we believe the AIF® standard is the baseline, not the exception, for high-net-worth financial planning. If you’re thinking about switching financial advisors, the selection of one of the 11,000 AIF® designation holders is a proven way to identify a professional who takes their fiduciary duties seriously.

Don’t Let Healthcare Derail Your Retirement

Rising healthcare costs are real, and they’re not going away. But with thoughtful, proactive planning, they don’t have to threaten the retirement you’ve built.

At Heritage Capital, we help clients throughout Connecticut and the U.S. plan for what’s ahead with clarity and purpose. That includes building a flexible retirement strategy that accounts for medical costs, long-term care, and the unexpected.

Thinking about changing financial advisors or starting fresh with a proactive plan? Let’s discuss how our fee-only approach, AIF® designation, and deep understanding of retirement planning in Connecticut can help grow and preserve your wealth, including rapidly rising healthcare costs.