Add to that worries about health-care costs in retirement, and those concerns are off the chart. They should be.

“I’ve seen people pay as much as $5,000 to $15,000 a month for their medical care in retirement,” said Katherine Dean, national director of wealth planning for Wells Fargo Private Bank.

According to the Employee Benefit Research Institute’s annual survey, more than half of retirees surveyed this year are not confident they have saved enough to pay their medical expenses during retirement.

EBRI says the average 65-year-old couple in retirement should expect to pay $163,000 in out-of-pocket expenses for health care, excluding long-term care. And even then, they have only a 50 percent chance of covering their actual costs. Add to that the annual rate of inflation for medical expenses of 5 percent to 7 percent for health-care expenses.

So, how do you plan for that?

Start with two simple steps, Dean said: “There needs to be a better acknowledgement that paying for health care in retirement is a pretty major issue and something they need to incorporate as part of their (financial) plan. The next step is to do an estimate as to what these costs will be and incorporate it into the plan.”

What Dean says you need to consider in your estimate: How soon you want to retire, how long you can expect to live, your current health status, the cost of medical care in your area, whether you will receive any employer health benefits and inflation.

Start with an honest assessment of your current health-care costs.

“Break it down,” said Kimberly Foss, founder of Empyrion Wealth Management in Roseville, Calif., and author of the book Wealthy by Design. “If you are 55 or 58 and you have significant health issues, you need to figure out what those costs are now and apply them to retirement.”

For instance, Foss says she has a client who is 51 and has significant health issues – not life-threatening, but significant. She’s already spending $1,500 a month ($18,000 a year) for health-care premiums. “That’s 20 percent of her living expenses on health care, and those issues will not go away in retirement,” Foss says.

Medicare won’t kick in until she’s 65, and even then she will still need to cover 40 percent of her medical costs out-of-pocket.

Foss said she has to build additional returns into her client’s portfolio to prepare for retirement. While normally she may seek a 4 percent to 5 percent return for a client’s portfolio, she may have to aim for 5.5 percent to 6 percent if there are health issues.

“Be proactive, and be prepared,” Foss said. “Health care should be specified out and should be earmarked in the portfolio because of the exorbitant amount it costs today.”

Some other alternatives to help with health care in retirement:

Long-term care insurance. Planners say people also need to consider that they might need long-term care. And then they need to figure out if long-term care is an option.

“Do you want to purchase long-term care insurance, or do you want to self insure?” asks Dean. “That can be $50,000 to $100,00 a year, with most people needing those services for two to five years.”

Health Savings Accounts. “One of the essentials that many consumers should be aware of is health savings accounts,” says Natasha Rankin, executive director of Employers Council on Flexible Compensation.

HSAs are tax-advantaged accounts and can be transferred from employer to employer.

If you retire, you can continue to contribute, until you qualify for Medicare or another health plan. But they are currently offered by only 30 percent of employers. And you must have an employer-sponsored HSA if you are to carry it into retirement. Current limits for 2012 contribution are $3,250 for single coverage and $6,450 for family coverage.”

Whatever path you choose, planning is key, the financial experts said.

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