The rate of return assumptions used in the program and the rate of return generated by the calculator should not be considered as suggesting or guaranteeing any rate of return or level of performance on any product, service or strategy offered by Homestead Advisers or Homestead Financial Services Corp., including any Homestead Fund.
Important
The results displayed in the Health Care Block are dependent on the information you have entered. Health care costs may be more or less than the results displayed due to a variety of factors not addressed in the Health Care Block. Costs associated with Long Term Care needs are not addressed within the Health Care Block.
The results generated by the Health Care Block are hypothetical in nature, do not reflect actual costs, and are not guarantees of future costs. You should consult with your financial advisor if you have questions about your ability to pay for future health care costs. This program does not provide legal, tax, accounting, or financial advice. Before making decisions with legal, tax, accounting, or financial ramifications, you should consult appropriate professionals for advice that is specific to your situation. The results displayed may vary with each use and over time.
Annual expense estimates utilized in the Health Care Block were provided by the following:
Type |
Data Source |
Time Period |
||
Private Insurance Prior to Medicare |
Center for Consumer Information & Insurance Oversight |
2022 |
||
Medicare Supplement |
Milliman |
2022 |
||
Medicare Part B |
Center for Medicare and Medicaid Services |
2022 |
||
Medicare Part D |
Center for Medicare and Medicaid Services |
2022 |
||
Out-of-Pocket Costs |
Milliman |
2022 |
||
Trend |
Milliman and Society of Actuaries Getzen Trend Model |
2022+ |
Methodology
The Health Care Block is designed to illustrate the potential health care costs you may experience over your lifetime. One major factor that impacts your health care estimate is whether you are a smoker, as this typically leads to health issues in the future in addition to shorter lifespans. If you wish to provide additional health information, the program can provide a more accurate estimate of future costs; however, this section is optional.
Health care costs change over your lifetime; however, one important item to consider when estimating your health care expenses is when you plan to retire. The software assumes you are eligible for Medicare when you turn 65 or the age you retire, whichever is later. If you retire before age 65, the program assumes you purchase a Bronze level plan on the Affordable Care Act (ACA) exchange until you turn 65. The cost estimated associated with these plans vary based on age and state.
In addition to the Medicare eligibility assumption mentioned previously, the following assumptions are made by the software:
1. Medicare Part B – The program assumes you enroll in Medicare Part B when eligible.
2. Medicare Part D – The program assumes you enroll in Medicare Part D when eligible.
3. Medigap Plan G – The program assumes you enroll in Medigap Plan G when eligible.
4. Out-of-Pocket Expenses – The program assumes you pay out of pocket expenses, as estimated by Milliman, each year. These amounts change with age and whether you are eligible for Medicare or not.
5. Inflation – The program assumes health care expenses inflate at the base inflation rate set by your advisor plus 2.80%.
Finally, when viewing your estimated health care costs in retirement, you can elect to view the results in current dollars or future dollars. By viewing the costs in current dollars, the program discounts each future year’s annual cost by the base inflation rate set by your advisor. If you want to view the actual cost estimate for the future year, you can do so by selecting “Future Prices.”
All costs displayed in the Health Care Block are estimated for informational purposes only; the actual costs you may experience over your lifetime may be more of less than the costs calculated within.
IMPORTANT: The projections or other information generated by iBlocks regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results.