Ask anybody what they think will be their biggest expense come retirement time, and odds are, they’ll say healthcare. After all, as we age, we simply break down. It costs a lot more money to keep a 1980’s Chevy running on the road than a brand new one. The same logic applies to people. It takes a lot more money to keep us healthy as we age.
Now ask anybody exactly how much they think they’ll need to have in savings in order to cover those costs, and you’ll get a blank look. And if they do give you an estimate, chances are good that it will be 100% a guess.
The reality is, we simply just can’t predict the future. I could get cancer and need expensive treatments, while you could go through old age relatively unscathed. The unknowns make it hard to accurately plan ahead, but what we can do is prepare for the average amount.
And that’s a lot more than any of us expected.