Suze Orman says many Americans underestimate this critical cost in retirement — 5 steps before it's too late
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For many retirees, budgeting becomes an act of precision: cutting back on travel, downsizing homes and seeking out seniors' discounts.
But there’s one expense that still manages to take a surprising toll, even for those who think they’ve planned their golden years well.
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Financial expert Suze Orman has warned that many Americans underestimate a critical cost in retirement, with one particular health-related expense that is often overlooked. And it’s one that some think will be covered almost free of charge.
Enjoying retirement stress-free can be easier if you identify this expense early. Here’s what to look out for, and what to do to mitigate any potential risks.
The true cost of health care
That crucial retirement expense, according to Orman (1), is health care — more specifically, the often misunderstood and underestimated costs of Medicare.
Many Americans assume that Medicare will cover most, if not all, of their medical needs after retirement. But Orman cautions that this is a dangerous belief.
While Medicare Part A (hospital insurance) is generally premium-free, the 2025 inpatient hospital deductible is only $1,676 per stay (up from $1,632 last year) — and that’s just one example of unexpected out-of-pocket costs (2). To put this in perspective, the average cost of a one-day hospital stay was $3,025 in 2022, according to Debt.org (3). Even worse, based on CDC data (4), the full average adjusted cost was $14,101 per inpatient stay at community hospitals, which refers to any non-federal, short-term general and special hospitals.
For many older Americans, suddenly being out an extra $1,349 per day of a hospital stay could be devastating.
It’s also important to remember that with age, the likelihood of a hospital stay increases. In 2019, individuals between 65 and 74 had a 16.9% chance of one or more hospital stays, while those over the age of 85 had a 26.1% chance, according to a separate CDC report (5).
Plus, Original Medicare (Parts A and B) doesn’t cover essentials such as dental, vision and hearing. Orman’s key advice is to get a solid Medigap policy to fill in these blind spots.
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