11 Healthcare Costs That Can Destroy Your Retirement (If You Don't Plan Ahead)

Planning for retirement typically means crunching a lot of numbers for housing, hobbies, and travel. But one of the most unpredictable and potentially devastating costs is health care. 

Medicare will cover many of your expenses, but it doesn't pay for everything. Gaps in coverage and rising out-of-pocket costs can lead to serious financial setbacks if not adequately planned for.

Planning ahead for overlooked health care costs could help you stretch your retirement dollars further.

Long-term care is one of the most expensive (and often least anticipated) health care costs in retirement. Medicare generally does not cover long-term custodial care in nursing homes or assisted living facilities, which differs from skilled nursing care that Medicare may cover for a limited period.

Without some type of long-term care insurance or dedicated savings plan, these services can quickly deplete your retirement funds. The cost of long-term care can easily reach over $100,000 annually.

Medicare often leaves several coverage gaps that can lead to steep out-of-pocket expenses. For instance, Original Medicare offers little to no coverage for routine vision, dental, and hearing services, and that's not even mentioning standard copays and deductibles for all types of care.

Retirees who skip Medigap or Medicare Advantage plans may pay far more than expected. Reviewing and selecting the right supplemental coverage can help protect your savings from these hidden costs.

Many retirees underestimate the cost of medications, especially if they take brand-name or specialty drugs. Medicare Part D does provide coverage for many of these drugs, but there are limitations. 

It's important to select your plan carefully and understand drug pricing to avoid having to pay hundreds or even thousands of dollars in monthly medication expenses.

Traditional Medicare offers little to no coverage for routine dental, vision, and hearing services, despite these becoming more important with age. Cleanings, crowns, eyeglasses, and hearing aids are all uncovered and must be paid for out of pocket.

These costs can add up quickly, potentially costing thousands a year. Medicare Advantage plans or private insurance can help manage these expenses.

Short-term home health care after a surgery or injury may be (partially) covered by Medicare if it's intermittent and considered medically necessary. However, daily personal care services and extensive long-term skilled care are often not covered.

These services may be necessary for managing chronic illnesses or avoiding institutional care. Ongoing home care can be a huge financial burden on retirees without long-term care planning or supplemental insurance.

A serious medical emergency or hospital admission can lead to surprise bills, even with Medicare Part A and B. ER visits and ambulance rides often come with deductibles and coinsurance fees, which can add up fast.

These emergencies are completely unexpected (most of the time), so it's important to plan ahead. Otherwise, a single emergency could create a substantial dent in your savings.

Mental health care is essential, and Medicare Part B does cover outpatient services like therapy and psychiatric care. However, beneficiaries are responsible for the Part B deductible and 20% coinsurance.

Finding providers who accept Medicare assignment and understanding specific plan networks (especially with Medicare Advantage) can sometimes be confusing.

Seeing a specialist outside your Medicare Advantage plan's network can lead to big costs. For those with Original Medicare and a Medigap plan, verify your provider accepts Medicare assignment to avoid balance billing.

Some retirees unknowingly visit providers who don't accept Medicare assignment, resulting in balance billing or denied claims.

Medicare can partially cover durable medical equipment like wheelchairs and CPAP machines, but not always in full. For instance, you might still be responsible for 20% of the cost (or more) plus any fees for service or maintenance. If you're managing a chronic condition, these ongoing costs can add up quickly.

Physical, occupational, and speech therapy are often critical after surgery or a stroke. Medicare only covers therapy deemed medically necessary, but coverage depends on meeting specific criteria and can be subject to review.

You could potentially face high bills if Medicare determines the services are no longer needed. Consider having a backup fund for therapy that you consider essential, but that your insurance might not.

Medicare does cover many different preventive services, like screenings and certain vaccines. However, there are often limitations or out-of-pocket costs.

For instance, Medicare might cover the flu shot, but newer vaccines like Shingrix might require an out-of-pocket cost. Staying on top of preventative care is essential, but this isn't always free.

Health care expenses in retirement can be unpredictable (and costly). While Medicare does provide a lot of coverage, it doesn't pay for everything. Overlooking gaps could put your long-term financial stability at risk. To build wealth that lasts through retirement, it's important to budget for uncovered costs and make smart insurance choices to help protect your savings.

An average retired individual aged 65 may need around $165,000 to cover health care costs throughout retirement. Make sure to plan this buffer into your savings to avoid a surprise later on.