Expenses don’t stop piling up just because you’ve retired. We’re juggling Medicare premiums, “donut hole” prescription costs, and specialist visits. Many of us are also financially helping out with our grandchildren. It’s a delicate balancing act.
Finding practical ways to manage these costs is essential for maintaining our quality of life and peace of mind, which is more important with each passing year.
Start With The Foundation
Let's establish a solid financial base before tackling healthcare specifics. Review your expenses from the past year. If you recently moved into Assisted Living, you may need to gather data for a few months to establish a new baseline. Like with everything else in life, history is essential! It will really help with creating a practical budget.
One thing that changed for me after retiring was the psychological shift from “I can always pick up another shift”' to “this is all I have.” When you're working full-time, you can pick up extra shifts here and there to help make up for the odds and ends. Your budget didn’t need to be as tight and locked in because there was a solid back-up plan. However in retirement, our income is fixed. The whole point is that we’re done hustling! And Social Security does not adjust for inflation. This makes the budgeting step less optional and more critical than it's ever been.
Look for subscriptions that may have outlived their usefulness. Maybe now that you’re living with your son and daughter-in-law, you can use their Netflix subscription. Between streaming services, magazines, and auto-renewals, these can drain hundreds annually. Tools like Rocket Money specialize in identifying these charges. My friend Sarah recently found out she was still paying for a gardening magazine subscription. She had no idea because it was being delivered to her old house!
Monarch Money consolidates financial accounts into a single view, which is helpful if managing finances has become more challenging with cognitive declines. The visual dashboard simplifies tracking without overwhelming you with details.
Now, create overarching budget categories with sub-categories within them. These will be much simpler if you have already transitioned to Independent Living, since many of your expenses are included in the general facility cost. However, if you’re still living at home, you may have made accessibility modifications to your home that require upkeep. Or you may rely more on food delivery services than you used to.
Input your historical expenses to determine typical monthly costs. I like using apps like You Need A Budget (YNAB) here, now that I’m looping my kids into my finances. You can have up to five people collaborating on a budget. I hate to think about a time when I won’t be here with them, but I want to make things easier if I can. By including them in the budgeting process now, they won’t be surprised by things later.
Don't aim for perfection here. We can adjust as we go. What matters is getting something down on paper so it’s not all living up in your head. Your kids will thank you later!
Think of Your Health Like Your House
If you’ve successfully retired, it was because you were responsible with money throughout your life. If you owned a house or car, you took good care of it. Why wouldn’t you do the same with your health?
Consider how you maintain a house—you schedule annual inspections and address small repairs before they become major problems. You don't feel guilty about these expenses. They're simply part of homeownership. And when money gets tight, you don’t just refuse to pay your property taxes.
Your health deserves the same proactive approach. Regular check-ups, prescriptions, and preventive screenings aren't optional extras anymore. They're maintenance that keeps you functioning well. Budget for these as essential line items, just like you budget for taxes and insurance. Make use of services like Granted Health, which works like Rocket Money but for your healthcare costs.
If you take daily medications, calculate the annual cost and divide by twelve. Add this to your monthly health budget as a fixed expense, not a surprise cost. Same with supplements, regular physical therapy appointments, or other ongoing treatments. Identify which screenings are recommended for your age bracket. Calculate the estimated annual cost for you and your spouse (if applicable), then create a monthly line item for “Estimated Health Costs.”
Your Health Can't Wait
After budgeting for everything, you might be intimidated by the numbers. When you see a large procedure estimate, it's tempting to think, "Well, I guess that's not happening this year." We can’t afford to think that way anymore! The time we have with loved ones, the activities we enjoy, the independence we value—all of it depends on maintaining our health. Being healthy and present is one of the greatest gifts we can give our families.
We model healthy habits for our kids and grandkids when we prioritize preventive care. If we expect our loved ones to take their health seriously, we need to practice what we preach.
The good news is that many providers are now offering in-house payment plans. Or, they work directly with medical financing companies like Cherry Financing. This could transform a $5,000 emergency procedure from becoming a financial crisis for your family into a reasonable $200 across 25 months. This can make the difference between keeping up with your health and postponing essential care indefinitely. When selecting new providers, inquire about available payment options during your first call.
Peace of Mind
Managing healthcare costs in retirement might require some more forethought and work than you’d hoped. However, if you were able to successfully retire, then you have already overcome many challenges in life. Some extra planning is worth it for the peace of mind it will provide you.
Remember: we don't have to choose between our health and our financial security. With smart budgeting and the right resources, we can prioritize both—and that's exactly what we deserve.