A recent analysis reveals that more than 80% of retirees do not account for long-term health expenses in their retirement planning, leading to significant financial strain. Strategic geographic relocation can reduce healthcare-related costs by thousands annually, depending on state-specific factors.
- Over 80% of retirees do not plan for future health costs.
- Average annual out-of-pocket health expenses range from $5,200 in Texas to $7,800 in Massachusetts.
- Relocation from high-cost to low-cost states can save up to $50,000 over 15 years.
- Assisted living costs vary from $4,100 to $6,500 monthly depending on state.
- States with no income tax offer additional financial advantages for retirees.
- Healthcare cost planning should be integrated into retirement location decisions.
More than 80% of retirees in the U.S. fail to incorporate future health care expenses into their retirement budgets, according to a comprehensive review of retirement readiness data. This oversight leaves many vulnerable to unexpected medical bills, prescription costs, and long-term care needs, which can exceed $30,000 over a 10-year retirement period for a single individual. The study highlights that health-related spending varies significantly by state. For example, retirees in states like Hawaii and Massachusetts face average annual out-of-pocket health costs of $7,800, while those in Texas and Florida report averages closer to $5,200. These differences stem from variations in state-level Medicaid expansion, prescription drug pricing, and availability of community-based care services. Retirees who relocate from high-cost states to lower-cost alternatives may save up to $50,000 over a 15-year retirement period. Key variables influencing cost include access to Medicare Advantage plans, supplemental insurance premiums, and local nursing home rates. In Arizona and Idaho, the median monthly cost for assisted living is $4,100, compared to $6,500 in New Jersey. Tax policies also play a role: states with no income tax and lower property taxes, such as Florida and Tennessee, offer additional financial relief for retirees managing health budgets. Financial advisors now recommend that retirees conduct a cost-of-living analysis that includes health-specific metrics before finalizing their retirement location. Early planning, combined with geographic mobility, can significantly improve financial resilience and reduce reliance on personal savings or family support.