FINANCIAL HOUSEKEEPING | Calculate health expenses in retirement
With employer-sponsored retiree health insurance looking increasingly unsure for many Americans, consumers are increasingly responsible for paying for their own health care, nursing care, prescription drugs and health insurance in retirement.
That being the case, health care costs should be factored into retirement planning and savings. A recent study from the Employee Benefit Research Institute calculated that, assuming Medicare benefits remain at current levels, couples will need about $300,000 to $500,000 to cover health expenses in retirement. Most Americans believe they will need less than half that amount.
At, a website run by MetLife, consumers can examine a publication called “Retirement Planning, Healthcare Considerations” that will help them shape their financial planning to include rising health costs as part of their retirement.
SHORT COURSE | Yield
In general, yield is the return you get on your capital investment, the total amount of income you earn each year as a percentage of what you put in.
A bond’s yield is the interest the bond pays, divided by its price. Thus, if you buy a 10-year, $1,000 bond paying 4.5 percent and hold the bond until it matures, you’ll earn $45 annually for an annual yield of 4.5 percent, the same as the interest rate.
A stock’s yield represents the dividend per share divided by its current price per share. Thus, a stock selling for $10 per share but paying an annual dividend of 20 cents per share is carrying a 2 percent yield.
