4 Ways Seniors Can Prepare for Surprise Medical Costs
Rising health care costs and gaps in traditional Medicare are catching many retirees off guard, sometimes forcing them to drain savings or scramble for solutions after a medical shock. According to Fidelity’s 2025 Retiree Health Care Cost Estimate, a 65-year-old retiring this year can expect to spend around $172,500 on healthcare through retirement—and that’s before factoring in the steep costs of long-term care, dental, vision or hearing, which Medicare typically doesn’t cover.
To help seniors and their families avoid financial whiplash, CBS News gathered advice from leading experts—and as I shared in the article, a proactive, multi-pronged approach can go a long way. One key step I recommend is earmarking a dedicated “medical emergency” fund: “There’s no magic number, but I usually advise retirees to earmark a medical ‘shock absorber’ fund, ideally $5,000 to $10,000 set aside specifically for healthcare curveballs.” If you’re still pre-Medicare, contribute as much as you can to a Health Savings Account (HSA)—it’s triple tax-free and rolls into retirement. Once on Medicare, keep your health fund in a high-yield savings or money market account for immediate access, so you don’t have to tap your living expenses for a sudden hospital bill or dental emergency.
The article also echoes what many experts know all too well: Medicare covers less than many assume, so reviewing your exact coverage on Medicare.gov (especially the exclusions) is crucial. Consider supplemental insurance like Medigap or Medicare Advantage to fill in as many coverage gaps as possible—especially for outpatient services where traditional Medicare only pays 80%, leaving you on the hook for the rest.
Finally, don’t overlook planning for long-term care (LTC). Out-of-pocket costs for nursing homes or in-home care can erode a nest egg rapidly. Early planning (even with hybrid life/LTC insurance products or inflation riders) can lock in lower premiums and provide more flexibility, especially if care is needed at home.
Bottom line:
Preparing for health care surprises means more than hoping you’ll avoid them. As I shared with CBS News, setting aside a specific “shock absorber” fund gives you breathing room—and peace of mind—should a big expense hit. Combine this with annual coverage reviews, the right supplemental policies, and early LTC planning so you’re ready for the expected and the unexpected alike. In retirement, the best prescription is proactive, personalized preparation.