Retiring can come with expensive healthcare costs. Americans can lessen these costs by taking steps to reduce them.

When we think about our golden years, we often dream of traveling, enjoying our hobbies, and having a comfortable place to call home. But one thing that often gets overlooked is healthcare. It may not be the most exciting topic, but it's one of the biggest and most unpredictable expenses that retirees face. According to Fidelity, the average 65-year-old who is retiring today will need about $172,500 just for healthcare expenses in retirement. And that doesn't even include long-term care, which can add even more to the bill. With healthcare costs rising faster than inflation and people living longer, it's becoming increasingly difficult to ignore the financial impact of medical care in retirement. Unfortunately, many retirees fail to plan for healthcare until it's too late. This is because estimating healthcare costs in retirement is no easy task. Premiums can go up, medical needs can change, and there are so many coverage options to choose from. In fact, American retirees are faced with thousands of different Medicare plan options, making it overwhelming to figure out the best choice. As a result, many people end up making mistakes that can cost them thousands of dollars each year. But the good news is that with some careful planning and smart choices, retirees can significantly reduce their healthcare costs. My OTC by Chapter has some important steps to share that can help offset the cost of healthcare in retirement. First and foremost, it's important to include healthcare as a dedicated line item in your retirement budget. While it's impossible to predict exactly how much you'll spend on healthcare, having an average estimate like the $172,500 figure quoted by Fidelity can provide a helpful baseline. This will also help prevent any surprises and reduce the likelihood of having to cut back on other retirement goals. Another helpful strategy is to use health savings accounts (HSAs) strategically. These accounts remain one of the most tax-efficient ways to pay for healthcare in retirement. Not only are the funds tax-free when used for qualified medical expenses, but they can also be used for Medicare Part B premiums. If you're still contributing to an HSA, maximizing your savings before retirement can provide a dedicated pool of funds for healthcare later in life. When it comes to Medicare, it's important to make smart decisions. Medicare is a great resource for U.S. retirees, but the sheer number of options can be overwhelming. That's why many retirees seek guidance from licensed Medicare agents to help them make sense of the system and choose the right coverage. There is no single "best" Medicare option for everyone. Some retirees may prioritize the predictable costs and provider flexibility of a Medigap plan, while others may focus on lower premiums offered by Medicare Advantage. It's important to carefully consider your own needs and choose the coverage that's right for you. And don't forget to review your coverage annually during Medicare's Open Enrollment Period. Plans can change every year, and it's important to make sure your current plan still meets your needs. This can help you avoid any unexpected costs or coverage gaps. Once you're enrolled in Medicare, how you use your benefits can also affect your spending. For example, taking advantage of preventative care services like vaccines and screenings can help you catch any health issues early on, potentially reducing your long-term healthcare costs. It's also important to understand your provider networks. If you have Original Medicare, you can see any doctor that accepts Medicare, which is the vast majority of doctors nationwide. But if you're on a Medicare Advantage plan, you'll have a specific local network. Always check that your providers are in-network to avoid any extra costs. And when it comes to prescription drugs, you can save money by using your plan's preferred providers. Many plans also have a preferred mail order option, so you don't have to worry about finding a preferred pharmacy near you. Lastly, take advantage of any ancillary benefits that may come with your Medicare Advantage plan. These can include things like over-the-counter benefits, fitness memberships, and dental coverage. These extra benefits can help you save money on everyday expenses and stay healthy. In conclusion, healthcare costs in retirement should not be an afterthought. While it's true that these costs can add up, by being proactive and making informed decisions about Medicare, and regularly reviewing your coverage, you can significantly reduce the burden. This story was produced by My OTC by Chapter and reviewed and distributed by Stacker. So don't forget to plan ahead and take control of your healthcare costs in retirement. Your future self will thank you.