A big part of the American Dream is the pay off when work ceases and retirement begins.  Whether we dream of the time we’re finally free to hop on the Orient Express, or lay on a hammock in Thailand for the rest of our lives, retirement is the Holy Grail of every American’s working life.

But how in the heck do we plan on paying for it?  It pays to be aware of the shifting financial landscape, particularly where health care costs are concerned.

Buddy can you spare $500K?

If you’re a reaching retirement age this year (and you’re healthy), you will be facing down health care premiums and auxiliary insurance to the tune of $288K.  In its 2016 Retirement Health Care Costs Data Report, HealthView Services reminds budding retirees about what health care doesn’t cover.  That means dental, vision and hearing care costs supplemented from your own pocket.  With your share to kick in, your lifetime expenses have now reached a stratospheric $377K and change.

But wait!  There’s more.  These figures are contemporary.  What about inflation?  That ever-present specter raises the stakes to $435K.  Add all that other stuff we just mentioned above (including deductibles) and you’re in it for over $567K.

Are you ready for skyrocketing health care costs?

HealthView’s 2016 report has some interesting news for younger folks smart enough to plan ahead, too – facts they won’t soon forget:

  • A couple entering retirement this year will have to spend 57% of their Social Security check on health care alone. The numbers go up from there for those hoping to retire early.  An example?  Those retiring at age 45 will spend 116% of SS payments on health costs.  That means they will have had to amass a considerable sum to keep themselves afloat in retirement.
  • And the cost of health care will only rise. Medicare premiums have taken a 16.1% quantum leap for preventive services.  This has forced up the cost of health care for those retiring by 7.3%.  Last year’s $104.90 per month is this year’s $121.80.
  • Women, listen up. You’ve got it even worse and that’s because your 91-year life span is longer than your male counterparts’ by four years.  While men will pony up to the tune of just over $429K, you’ll be paying $548K and change for your life time health care.

Plan now

Millennials and their Gen X elders would be well-advised to start saving their nickels and dimes now.  With health care costs rising, not thinking ahead could leave them out in the cold, clutching a Social Security check that doesn’t even pay the rent, much less their health care costs.

While we all dream of being able to walk away from our working lives and retiring, it’s clear that planning for that moment is incumbent upon each and every one of us.  For those of us gazing at a distant event horizon on which retirement age is a minute speck, thinking ahead is even more important.  Inflation and changing circumstances can take a bite out of your retirement, leaving you wishing you’d given it more thought.

The Orient Express is pretty expensive the last time I checked.  If you want to hop on it in retirement, I genuinely hope your piggy bank is well fed.