What Will Healthcare Actually Cost You in Retirement?
Medicare Covers More Than Most People Expect — and Less Than Almost Everyone Assumes
Medicare is essential. It covers hospital stays, physician visits, outpatient services, and prescription drugs. For most retirees, it forms the backbone of their healthcare coverage. But there is a significant gap that catches people off guard: Medicare does not cover long-term custodial care.
If you ever need help with daily activities — bathing, dressing, eating, or moving around your home — because of aging, illness, or cognitive decline, Medicare will not pay for that care. Medicaid may, but only after you have spent down most of your assets. That distinction matters enormously when you are planning for medical expenses in retirement, and it is one of the most consequential points of confusion we address with clients.
Understanding what Medicare covers, what it costs, and where it stops is the starting point for any honest retirement healthcare plan.
Most retirement plans account for housing, food, travel, and income. Far fewer put a real number next to healthcare — and that gap is where retirement plans quietly fall apart. Fidelity estimates that the average couple retiring today may need over $300,000 to cover healthcare costs in retirement, and that figure does not include long-term custodial care.
Retirement healthcare planning rhode island residents need isn't a separate conversation from savings and income planning — it belongs in the same room. At PG Financial Group, we treat projected Medicare premiums, out-of-pocket costs, and potential care expenses as core budget items, not variables to sort out later.
Healthcare Is a Retirement Budget Line Item, Not an Afterthought
The Real Cost of the Gap Medicare Leaves Behind
Long-term care is among the most expensive and least predictable line items in any retirement plan. In Rhode Island, the median annual cost of a private room in a nursing facility exceeds $130,000. Home health aide services average over $60,000 per year. These are not rare edge cases — roughly 70% of people turning 65 will need some form of long-term care during their lifetime.
Planning for this exposure means looking at several options honestly:
- Long-term care insurance, which can cover home care, assisted living, and nursing facility costs
- Short-term care insurance, which addresses recovery periods and shorter care needs that Medicare won't cover
- Hybrid life insurance policies that combine a death benefit with a long-term care rider
- Annuity structures that can generate guaranteed income to help absorb care costs
No single solution fits every situation. The right approach depends on your age, health, savings, family structure, and how much risk you are willing to carry. That is exactly what a coordinated retirement healthcare planning review is designed to work through.
Why Coordinating Medicare and Long-Term Care Planning Under One Roof Matters
Most people piece together their retirement healthcare picture across multiple conversations — a Medicare agent here, a financial advisor there, maybe a separate conversation about long-term care insurance somewhere else. No one sees the whole picture, and the pieces don't always fit together.
At PG Financial Group, Medicare and long-term care planning sit under the same roof. That means when we help a client choose between a Medicare Advantage plan and a Medicare Supplement plan, we are also thinking about how that choice interacts with their long-term care exposure and their retirement income strategy. The decisions are connected, and we treat them that way.
We are an independent agency contracted with 15+ A-rated carriers, which means our recommendations are shaped by your situation — not by which company pays us the most. And because we offer bilingual service in English and Spanish, we can have these conversations with clients and families in the language that feels most natural.
Real Clients, Real Experiences
Common Questions About Planning for Healthcare Costs in Retirement
Does Medicare cover long-term care costs?
Medicare does not cover long-term custodial care — the ongoing assistance with daily activities that many people need as they age. Medicare may cover short-term skilled nursing care after a qualifying hospital stay, but that coverage is limited in duration and scope. Long-term care insurance or other planning strategies are typically needed to address this gap.Medicare does not cover long-term custodial care — the ongoing assistance with daily activities that many people need as they age. Medicare may cover short-term skilled nursing care after a qualifying hospital stay, but that coverage is limited in duration and scope. Long-term care insurance or other planning strategies are typically needed to address this gap.How much should I budget for healthcare in retirement?
There is no single answer, because costs depend on your Medicare plan choice, your health status, where you live, and whether you ever need long-term care. What we can do is build a realistic projection that accounts for expected Medicare premiums and out-of-pocket costs alongside potential care exposure, so you have a real number to plan around rather than a guess.There is no single answer, because costs depend on your Medicare plan choice, your health status, where you live, and whether you ever need long-term care. What we can do is build a realistic projection that accounts for expected Medicare premiums and out-of-pocket costs alongside potential care exposure, so you have a real number to plan around rather than a guess.When should I start planning for retirement healthcare costs?
The earlier the better, particularly for long-term care insurance, where premiums are significantly lower when you apply in your 50s or early 60s while you are still in good health. Medicare planning typically becomes active around age 64, but coordinating it with your broader retirement income picture should happen well before your enrollment window opens.The earlier the better, particularly for long-term care insurance, where premiums are significantly lower when you apply in your 50s or early 60s while you are still in good health. Medicare planning typically becomes active around age 64, but coordinating it with your broader retirement income picture should happen well before your enrollment window opens.What is the difference between long-term care insurance and short-term care insurance?
Long-term care insurance is designed for extended care needs — typically covering home care, assisted living, or nursing facility costs over a period of years. Short-term care insurance covers a shorter window, usually up to 360 days, and can fill gaps that Medicare leaves during recovery from surgery, illness, or injury. Both serve different planning purposes, and some clients carry both.Long-term care insurance is designed for extended care needs — typically covering home care, assisted living, or nursing facility costs over a period of years. Short-term care insurance covers a shorter window, usually up to 360 days, and can fill gaps that Medicare leaves during recovery from surgery, illness, or injury. Both serve different planning purposes, and some clients carry both.Can I get help with Medicare and long-term care planning in Spanish?
Yes. PG Financial Group offers bilingual service in English and Spanish, so clients and their families can work through these decisions in the language that is most comfortable for them. We serve communities across Rhode Island, including areas with large Spanish-speaking populations, and we welcome those conversations.Yes. PG Financial Group offers bilingual service in English and Spanish, so clients and their families can work through these decisions in the language that is most comfortable for them. We serve communities across Rhode Island, including areas with large Spanish-speaking populations, and we welcome those conversations.
One Conversation That Covers the Whole Picture
Planning for healthcare in retirement is not a single decision — it is a set of connected decisions that work better when someone is looking at all of them together. At PG Financial Group, we bring Medicare planning, long-term care options, and retirement income considerations into one conversation, so nothing falls through the cracks.
We have 25 years of combined experience helping Rhode Island families navigate these decisions, and we hold an A+ rating with the Better Business Bureau. If you are approaching retirement and want a clear-eyed look at what healthcare will actually cost you — and what you can do about it — we are ready to help.
