The Two Biggest Retirement Costs

(2 Minute Read)

The U.S. Department of Labor estimates that a retiree that makes a salary of $50,000 before taxes should expect to need between $35,000 and $45,000 every year in retirement to maintain the same lifestyle. What many seniors might not realize is just how much of that yearly budget will go to just two expenditures: housing and health care.


1 in 5 seniors who are 75 and older still have mortgage debt. Many seniors choose to rent their homes instead of owning, whether they rent a house, an apartment, or assisted living spaces. Seniors face paying an average of 36.5% of their total retirement costs in housing alone, especially with expenses like utilities, insurance, and maintenance. The Bureau of Labor Statistics found in 2014 that the average housing costs for seniors 75 and older was $13,375 annually.

Health care

When it comes to health care, seniors experience a fluctuation in costs that they probably did not have before retirement. Even with Medicare, seniors still pay monthly premiums, co-pays, drug costs, and more, which adds up to an average of $5,708 a year— roughly 15.6% of the average retiree’s yearly budget. Fidelity released a study in 2015 which found that senior couples aged 65+ would likely spend $245,000 on out-of-pocket health care costs during their retirement. That figure doesn’t even include the costs associated with assisted living or living in a nursing home, which alone can add tens of thousands of dollars annually.

How to Prepare for These Costs

As seniors prepare for their retirement, it’s critical that they know what to expect. Housing and health care costs together make up 52% of total annual expenditures for seniors ages 75 and up. As seniors get older, those costs can change dramatically, especially if the need to enter an assisted living facility arises. Without proper preparation, seniors can easily face unsuspected costs and, in some situations, those costs can become hard to manage, especially on a fixed income. One way retirees can supplement their retirement funds and keep their lifestyle (even with rising health care costs) is to sell their life insurance policies through a life settlement.

Visit our website today for more information on life settlements, and see if your senior clients qualify for one today!

Get in touch with Life Settlement Advisors today to take the first step toward converting your policy into cash.
Life Settlement Advisors
Leo LaGrotte
At Life Settlement Advisors, we strive to be a voice of confidence and assurance for our clients. Our goal is to educate you about the life settlement process so you can make an educated decision about whether it is right for you.