This article looks at the 25 best US cities for retirement healthcare. Check out the complete list of 25 Best U.S. Cities for Retirement Healthcare.
Healthcare Costs in Retirement: A Comprehensive Overview
Healthcare is one of the biggest expenses for retirees. Studies estimate that a retired couple needs as much as $351,000 to cover healthcare costs during the retirement period. In contrast, the Survey of Consumer Finances reveals that the average retirement savings for all families is only $333,940, savings which must also cover groceries, rent, utilities, and much more. To make things worse, this number only depicts 54.4% of families that hold retirement accounts. The rest (almost half) of America isn’t investing for retirement at all. A lot of retirees are under the false impression that Medicare will be there for them once they retire. While this is partially true, Medicare doesn’t kick in until the age of 65. Also, it doesn’t cover everything, something that many individuals lack knowledge about. According to a 2019 AARP study, people with traditional Medicare spent $6,663 on average on medical services and insurance premiums. Moreover, the Center for Retirement Research at Boston College reveals that Medicare and other insurers cover almost 78% of total healthcare spending. Meanwhile, households cover the remaining 22%-making it $67,260, on average for a 65-year-old household. Retirees need to understand the limitations of such programs, otherwise they will be subject to bills they aren’t prepared to pay. Some items that Medicare doesn’t cover include long-term care, the majority of dental care, eye exams, dentures, cosmetic surgery, routine physical exams, and hearing aids, amongst others.
While healthcare costs may seem scary, a T. Rowe Price Group, Inc. (NASDAQ:TROW) report reveals how planning for healthcare can be made simpler by using the available assets and income that retirees have. Approaching these costs as an annual expense, for example, can help retirees plan better for them. Moreover, premium and out-of-care expenses must be treated differently. As per a T. Rowe Price Group, Inc. (NASDAQ:TROW) estimates based on 2024 Medicare premiums and data from the Health and Retirement Study (HRS), the majority of retirees pay between 73% and 81% of annual healthcare costs to Medicare premiums with prescription drug coverage amount. In contrast, out-of-pocket expenses vary greatly for each individual, and can also change month to month. These costs are the primary source of uncertainty in healthcare costs for retirees. T. Rowe Price Group, Inc. (NASDAQ:TROW) believes that maintaining a savings account having enough liquid expenses to cater to annual out-of-pocket expenses and replenishing it on an annual basis, can help mitigate the level of uncertainty associated with out-of-pocket expenses.
T Rowe Price Group, Inc. (NASDAQ:TROW) recently made it to our list of 10 Best Dividend Growth Stocks to Buy and Hold Now. It is an investment management company offering a wide range of services such as personal finance, retirement, and investment products and solutions. Its revenue model relies on charging fees to manage investments for its clients. These fees are typically associated with assets under management (AUM), causing the company’s earnings to fluctuate depending on the changes in the value of the assets it manages. As of May, the company reported a growth in its AUM from $1.49 million to $1.54 million owing to favorable market conditions. The company is a dividend aristocrat with a 38-year track record of consistent dividend growth. The company’s current quarterly dividend comes in at $1.24 per share.
While we at Insider Monkey recognize the potential of T Rowe Price Group, Inc. (NASDAQ:TROW) stock and its ability to generate superior returns in comparison to its competitors, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
While healthcare expenses are a significant cause of concern for retirees, choosing where to retire to avail good-quality healthcare is also a matter of concern for many individuals. For this reason, we have compiled a list of the best places to retire in the US with good healthcare.
Methodology
To compile the list of best U.S. cities for retirement healthcare, we conducted a comprehensive assessment using data from authoritative sources including Medbelle, Best Hospital Review, Healthcare Insider, Becker’s Hospital Review, Newsweek, Healthgrades, and Blue Cross Blue Shield. This initial evaluation identified cities with exceptional hospitals, healthcare quality, services, and healthcare workers. The selected cities were then rigorously analyzed based on key metrics such as affordability, healthcare quality, senior services, and accessibility. This approach allowed us to derive a final Insider Monkey Score.
Here is the Best U.S. City for Retirement Healthcare:
1. Rochester, Minnesota
Insider Monkey Score: 90
Based on our methodology, the best US city for healthcare is Rochester, Minnesota. Home to the world-renowned Mayo Clinic, Rochester has a wide variety of resources available for seniors, such as wellness programs, social services, and senior centers. According to a FAIR Health Analysis, Rochester has one of the best ratio of primary care providers to patients in US, so this is the place to be if one ever wants to see the doctor. The analysis reveals that there are 114.5 people in the Rochester core-based statistical area for every primary care provider in the city. The two major institutes largely responsible for this prestige are the Mayo Clinic and Olmsted Medical Center.
Check out the complete list of 25 Best U.S. Cities for Retirement Healthcare.
At Insider Monkey, we delve into a variety of topics, ranging from the best places to retire to the best MBA programs; however, our expertise lies in identifying the top-performing stocks. Currently, Artificial Intelligence (AI) technology stands out as one of the most promising fields. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published on Insider Monkey.