Lesson 3.3 — Realistic Out-of-Pocket Costs
Even with Medicare, retirees should expect to pay thousands per year for health care expenses. Costs increase with age and vary by coverage choices.
Here is an example of what this may look like with Original Medicare with a Medigap + Part D plan for 2026:
Premiums: $202.90 (Part B) + $180 (Medigap G) + $20 (Part D) = $402.90 per month ($4,834.80 per year).
Maximum Out-of-Pocket (MOOP): $283 (Part B deductible) + $2,100 (Part D Maximum) + $400 (Dental & Vision) = $2,783 per year.
Total Maximum Spending: $4,834.80 (Annual Premiums) + $2,783 (Annual OOP) = $7,617.80 per year.
Planning for realistic expenses helps prevent financial stress and protects retirement income.
Three Key Points
- Out-of-pocket costs are common in retirement.
- Expenses typically increase with age.
- Accurate planning reduces financial strain.