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Health Care Costs in Retirement: What The Boeing Company Employees Need to Know and How to Prepare

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'The Boeing Company employees must recognize the importance of early health care planning, as escalating medical expenses and the need for long-term care can quickly deplete retirement savings without strategic budgeting and proactive measures like long-term care insurance and health savings accounts.' – Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement.

'The Boeing Company employees should prioritize health care planning as an essential part of their retirement strategy, so they can prepare for the rising costs of medical care, which can significantly impact their financial stability during retirement.' – Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

  1. The importance of health care costs in retirement and the impact on retirement savings.

  2. Strategies for budgeting for health care expenses, including long-term care insurance and health savings accounts (HSAs).

  3. Tools and resources to help The Boeing Company employees plan for health care costs in retirement.

When planning for retirement, health care expenses are a critical consideration for The Boeing Company employees. While many retirees believe that Medicare will cover most of their medical bills, the reality is often quite different. Prescription drugs, long-term care, co-payments, and premiums are just some of the out-of-pocket costs that can quickly accumulate, leading to significant financial strain. Over time, these expenses could deplete your retirement savings if not adequately planned for. A thoughtful approach is required to lessen the impact of these rising costs, especially since health care costs are rising at a faster rate than inflation.

Making informed decisions requires an understanding of how lifestyle choices, family medical history, personal health, and inflation can affect health care expenses. The Boeing Company employees can safeguard their retirement savings by implementing strategies such as investing in long-term care insurance, using employer-sponsored accounts, and purchasing supplemental insurance. This article explores the importance of health care costs in retirement, ways to budget for them, and tools to help The Boeing Company employees plan ahead.

The Importance of Medical Expenses in Retirement

Sadly, Medicare doesn't cover all medical needs, and health care costs rank among the largest expenses seniors face. While Medicare covers approximately 98.2% of individuals aged 65 and older, 1  it doesn’t pay for all medical costs. A study by the Kaiser Family Foundation (KFF) found that 22% of retirees have medical debt, 2  largely due to increasing medical expenses and unexpected out-of-pocket costs. Prescription drugs, supplemental health plans, and long-term care services, such as in-home care or nursing facility stays, are common examples of these expenses. With health care costs rising faster than inflation, this can significantly reduce retirement savings, particularly for those unprepared.

As Paul Bergeron, a financial advisor with The Retirement Group, points out, 'The Boeing Company retirees unprepared for rising health care  costs can face considerable financial challenges and unexpected out-of-pocket expenses.' This makes planning for health care costs crucial, especially considering the impact of inflation, medical advancements, and longer life expectancies on future health care needs.

Budgeting for Health Care Costs in Retirement

While retirees may have little control over how quickly health care prices rise, they can take action to reduce their personal financial risk. The following strategies can help The Boeing Company employees manage health care expenses during retirement.

Long-Term Care Insurance

One of the largest medical expenses Medicare doesn't cover is non-medical long-term care. According to the 2024 Cost of Care Survey by Genworth and CareScout, the average cost of an assisted living facility is $70,800 per year, while a semi-private room in a skilled nursing facility can cost up to $111,325 annually. 3  Since 69% of individuals who reach age 65 today are expected to require long-term care at some point, 4  planning ahead is essential.

Without long-term care insurance, retirees will have to pay for these expenses out of pocket, which can rapidly deplete retirement funds. Purchasing long-term care insurance while in good health is an effective way to reduce the financial impact of these costs. The mid-50s is typically the best time to obtain this coverage. At this stage, people are typically still healthy enough to qualify for reasonable rates and have ample time to pay for the coverage before it's needed. However, premiums tend to rise as individuals age, with increases of 2-4% in their 50s and 6-8% in their 60s. Additionally, applicants over age 70 may struggle to find coverage, as 38.2% of applicants aged 65-69 and 45% of those 70 and older are typically rejected. 5

For those seeking both life insurance and long-term care coverage, buying a life insurance policy with a long-term care rider can be a cost-effective solution.

Health Savings Accounts (HSAs)

The Boeing Company employees with high-deductible health plans (HDHPs) can take advantage of health savings accounts (HSAs) to save for medical expenses on a tax-advantaged basis. HSAs offer three tax benefits: tax-deductible contributions, tax-deferred growth, and tax-free withdrawals for eligible medical expenses. 'The HSA combines the best features of a Roth IRA and a traditional IRA,' says Tyson Mavar of The Retirement Group. 'Contributions are tax-deductible, they grow tax-deferred, and withdrawals for qualified medical expenses, including Medicare premiums, are tax-free.'

Unlike other employer-sponsored accounts, HSAs do not have a 'use-it-or-lose-it' policy, meaning the funds can be carried over from year to year. Contributing to an HSA as retirement approaches can result in substantial savings for future medical costs. For 2025, the contribution limit is $8,550 for family coverage and $4,300 for individual coverage. Individuals 55 and older can contribute an additional $1,000 as a catch-up payment.

Starting an HSA early in one’s career gives ample time to build savings, but even employees in their 50s nearing retirement can benefit from contributing up to the maximum allowed.

Supplemental Insurance and Medicare

While Medicare provides basic coverage, it doesn't cover all medical expenses. For example, routine physical exams, dental, vision, and hearing treatments are not covered by Medicare. These out-of-pocket costs can quickly add up.

Medigap, or Medicare supplemental insurance, can help cover the gaps in Medicare’s coverage. These plans, offered by private insurers, cover expenses like co-payments, co-insurance, and deductibles. Medicare Advantage (Part C) plans, also offered by private insurers, combine basic Medicare with prescription coverage and include regular dental, vision, and hearing care.

By investing in Medigap or Medicare Advantage, The Boeing Company retirees can reduce the financial burden of unexpected medical costs, though both options carry additional monthly premiums.

Retiree Reimbursement Arrangements (RRAs)

Retiree reimbursement arrangements (RRAs) are employer-sponsored initiatives designed to help retirees pay for medical expenses. The Boeing Company retirees can take advantage of any available RRAs, which allow them to receive reimbursements for eligible medical expenses, such as Medicare premiums, up to a specified annual limit. Some employers even allow unused funds to roll over from year to year. Since RRAs are fully employer-funded, they provide retirees with additional financial support for health care costs.

Optimizing the use of The Boeing Company’s RRA, if any, can significantly reduce your retirement medical costs.

Telehealth Services

Telehealth, the remote delivery of medical services, is increasingly popular among retirees. It offers a convenient option for individuals who may have difficulty traveling or leaving their homes to visit a doctor. Telehealth allows retirees to manage minor health issues, prescriptions, and chronic conditions without the need for in-person visits, reducing the incidence of emergency room visits and hospitalizations. Additionally, telehealth services are often more affordable than in-person appointments, contributing to overall savings.

The Boeing Company employees should check with their health care providers or Medicare Advantage plans to learn about the telehealth services available to them, as some plans may offer enhanced telehealth benefits compared to traditional Medicare.

Preventive Care

Preventive care plays a crucial role in reducing health care costs in retirement. Regular check-ups, screenings, and vaccinations help identify health risks early, lowering the need for more expensive treatments down the road. Research shows that retirees who maintain an active lifestyle and engage in preventive care generally face lower long-term health care expenses.

Financial advisor Tyson Mavar notes, 'Eating well, exercising regulatory, and making other healthy lifestyle choices can help you save untold dollars over time.' Regular physical activity can also reduce cognitive decline, which may lower the need for long-term care in later years.

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Key Considerations When Budgeting for Health Care Costs

Creating a personalized health care budget is essential for retirees, especially The Boeing Company employees. Factors such as lifestyle, family medical history, and personal health can significantly influence health care expenses. For instance, retirees with pre-existing conditions may require more frequent doctor visits, prescriptions, and treatments, resulting in higher out-of-pocket costs. While Medicare offers coverage for those with pre-existing conditions, retirees should plan for additional expenses, such as supplemental insurance or necessary treatments.

Family medical history is another important consideration. If there is a history of chronic or serious illnesses in your family, your health care expenses may increase as you age. Conversely, if longevity runs in your family, you may need to prepare for longer-term medical care.

Finally, lifestyle choices directly affect health care costs. Retirees who maintain healthy habits, such as regular exercise and a balanced diet, are less likely to face high medical costs than those who smoke or lead a sedentary lifestyle.

Preparing for the Unexpected

Even with careful planning, unexpected medical expenses may still arise in retirement. As Scottish poet Robert Burns famously said, 'The best-laid plans often go awry,' and retirement savings are no exception. Creating an emergency fund and having backup plans in place are essential to managing unexpected medical costs.

Long-term care insurance, an emergency fund, and supplemental insurance plans such as Medigap or Medicare Advantage can all help lessen the financial impact of unforeseen health care costs.

Resources for Budgeting Health Care Costs

There are several tools and resources available to help The Boeing Company employees estimate and plan for retirement health care costs:

  • Fidelity’s Health Cost Estimator : A free tool that projects future health care expenses.

  • Medicare.gov Plan Finder : Helps compare Medicare plans based on prescription costs and coverage.

  • AARP Health Care Cost Calculator : An online tool for estimating health care expenses in retirement.

  • Financial advisors : Your financial advisor can provide you with personalized estimates and strategies for managing retirement health care costs.

Conclusion

Health care costs must be factored into any retirement plan. Rising medical expenses, inflation, and the need for long-term care can significantly impact retirement savings. By using tools such as long-term care insurance, HSAs, and supplemental Medicare plans, The Boeing Company employees can proactively plan for health care costs and safeguard their financial future in retirement. Planning for unexpected costs, such as emergencies or unanticipated medical conditions, can help preserve retirement funds throughout your lifetime.

Sources:

1. National Center for Biotechnology Information. ' Association of Medicare eligibility with access to and affordability of care amonjg older cancer survivors .' 23 Mar. 2024.

2. Kaiser Family Foundation. ' What are the Consequences of Health Care Debt Among Older Adults? ' 26 Jul 2024.

3. Genworth and CareScout. ' Genworth and CareScout Release Cost of Care Survey Results for 2024 .' 4 Mar. 2025. 

4. Administration for Community Living. ' How Much Care Will You Need? ' 18 Feb. 2020.

5. American Association for Long-Term Care Insurance. ' Nearly Half Of Oldest Long-Term Care Insurance Applicants Declined .' 

Other resources:

1. Almazora, Leo. 'Healthcare Costs Continue to Rise for Retired Seniors.'  Investment News , 8 Aug. 2024.

2. 'Planning for Healthcare Costs: How Financial Advisers Can Guide Clients.'  Kiplinger , Mar. 2025.

3. 'Retired? Here's 5 Reasons You Still Need an Emergency Fund—Plus How Much It Should Cover.'  Investopedia , 30 May 2025.

4. 'Cancer Treatments Derailed a Boomer's Retirement.'  Business Insider , 28 May 2025.

5. 'The Real Cost of Health Care in Retirement.'  RBC Wealth Management , Oct. 2024.

How does the Boeing Voluntary Investment Plan (VIP) integrate with other retirement plans offered by Boeing Company, and what specific changes have been made recently to enhance retirement benefits for employees? Discuss the implications these changes might have on employees planning their retirement.

The Boeing Voluntary Investment Plan (VIP) integrates with other Boeing retirement plans, such as the Boeing Pension Value Plan and other defined benefit plans. Recently, changes like the addition of a Roth contribution option and a shift toward enhanced defined contributions have been made to improve benefits for certain employees, particularly those who previously participated in both defined benefit and defined contribution plans. These changes enhance retirement planning flexibility but may require employees to adjust their strategies depending on their long-term financial goals.

What are the key eligibility requirements for participation in the Boeing Voluntary Investment Plan, and how do these requirements align with industry standards for retirement plans within large corporations? Specifically, address how the eligibility criteria impact various groups of employees within Boeing Company.

Key eligibility requirements for the Boeing VIP include no minimum age or service requirements, though certain groups, such as union employees and non-resident aliens, may be excluded. These criteria align with industry standards, making the plan accessible to a broad range of employees. The inclusivity of eligibility supports employees at various career stages, though exclusions may affect unionized employees or contractors differently from their non-union counterparts​(Boeing_Voluntary_Invest…).

In what ways does the Boeing Voluntary Investment Plan support employees who wish to make catch-up contributions, particularly for those nearing retirement age? Examine the financial benefits and potential challenges associated with these contributions for Boeing employees.

Boeing VIP allows catch-up contributions for employees aged 50 and over, aligning with IRS guidelines for retirement savings. This option benefits employees nearing retirement by enabling them to contribute more toward their savings. However, the increased financial burden of larger contributions could pose a challenge for employees with tighter budgets, potentially limiting their ability to maximize catch-up contributions​(Boeing_Voluntary_Invest…).

How does the investment allocation strategy within the Boeing Voluntary Investment Plan reflect the principles of risk management and diversification? Evaluate the types of investment options available and their relevance for Boeing employees planning for retirement.

The investment strategy of Boeing VIP emphasizes risk management and diversification, offering a wide range of options, including lifecycle funds, index funds, and company stock. These choices provide flexibility for employees with varying risk tolerances, helping them manage retirement savings effectively. The availability of different fund types ensures that employees can align their investment choices with their retirement timelines and risk preferences​(Boeing_Voluntary_Invest…).

What options does the Boeing Voluntary Investment Plan provide for loans and withdrawals, and how do these options affect employees’ financial planning? Analyze the conditions under which Boeing employees can access their funds and the implications of these conditions on long-term retirement savings.

Boeing VIP offers loans and withdrawal options, including hardship withdrawals and in-service distributions at age 59½. These features provide flexibility in accessing retirement funds but come with conditions that could affect long-term savings. For example, taking a loan or withdrawal may reduce the funds available for retirement and may lead to penalties, making it important for employees to carefully consider the implications before accessing their funds​(Boeing_Voluntary_Invest…).

How can Boeing employees effectively utilize the resources available through the Boeing Retirement Service Center to optimize their retirement planning? Discuss the types of support services provided and how they can aid employees in making informed decisions regarding their retirement benefits.

Boeing employees can utilize resources through the Boeing Retirement Service Center, which provides support for retirement planning. The center offers tools, counseling, and online resources to help employees understand their options and optimize their benefits. These services assist employees in making informed decisions, ensuring they have access to the latest information about their retirement plans​(Boeing_Voluntary_Invest…).

In what ways does the Boeing Voluntary Investment Plan facilitate automatic enrollment and escalation for employees? Assess the impact of these features on employee participation rates and retirement savings at Boeing Company.

Automatic enrollment and escalation features in the Boeing VIP encourage higher participation rates and increased savings. Employees are automatically enrolled at 4% pre-tax contributions, with an option for annual increases of 1% up to 8%. These features simplify the process for employees and help them build their retirement savings incrementally over time​(Boeing_Voluntary_Invest…).

How does Boeing Company ensure that its pension and retirement plans remain compliant with current IRS regulations and requirements? Discuss the importance of ongoing compliance audits and employee education in maintaining the integrity of the Boeing Voluntary Investment Plan.

Boeing ensures compliance with IRS regulations by regularly updating its plans and conducting compliance audits. Maintaining adherence to regulations is essential for protecting the plan's tax-qualified status, and Boeing also focuses on employee education to ensure they understand the requirements and benefits of the plan​(Boeing_Voluntary_Invest…).

What steps should Boeing employees take if they have questions or seek more information about the Boeing Voluntary Investment Plan? Outline the available channels for communication and the types of inquiries that can be directed to Boeing's human resources department.

Boeing employees with questions about the VIP can contact the Boeing Retirement Service Center or their human resources department. These channels provide assistance with inquiries related to plan features, contributions, and withdrawals, offering personalized guidance to help employees manage their retirement planning effectively​(Boeing_Voluntary_Invest…).

How does the recent shift from traditional defined-benefit pensions to a defined-contribution model, as seen in the Boeing Voluntary Investment Plan, influence the financial security of future retirees from Boeing? Explore the long-term effects this transition may have on employee savings behavior and retirement readiness.

The shift from traditional defined-benefit pensions to a defined-contribution model, like the Boeing VIP, changes the way employees plan for retirement. Employees are now more responsible for managing their own investments and savings, which may lead to varying levels of financial security depending on their decisions. This transition emphasizes the need for employees to be more proactive in their retirement planning to ensure they meet their long-term financial goals​(Boeing_Voluntary_Invest…).

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.
Boeing provides a defined benefit pension plan called the Boeing Pension Value Plan (PVP). Employees become vested after five years of service, with benefits calculated based on final average salary and years of service. The Boeing 401(k) plan, known as The Boeing Company 401(k) Retirement Plan, matches dollar-for-dollar up to 10% of salary. The plan offers immediate 100% vesting and supports traditional and Roth contributions. [Source: Boeing Benefits Handbook, 2022, p. 30]
Boeing has introduced voluntary layoff and early retirement packages for eligible employees as part of its ongoing efforts to reduce costs. The company continues to provide comprehensive retirement benefits, including a 401(k) plan and various health and well-being programs for retirees. Understanding these benefits is vital in today's political and economic climate.
Boeing grants stock options and RSUs to incentivize employees. Stock options allow employees to buy shares at a set price after vesting, while RSUs are awarded with vesting conditions such as tenure or performance. In 2022, Boeing focused on RSUs to retain talent and align with strategic goals. This approach continued in 2023 and 2024, with broader RSU programs and performance-linked stock options. Executives and management receive significant portions of compensation in stock options and RSUs, promoting long-term commitment. [Source: Boeing Annual Reports 2022-2024, p. 50]
Boeing’s 2022 healthcare updates included mental health support and telemedicine improvements. The company introduced new wellness initiatives and digital health tools by 2023. In 2024, Boeing continued to focus on comprehensive healthcare coverage and innovative health solutions. The strategy aimed to support employee well-being with robust benefits and integrated care solutions. Boeing’s approach included enhancements to mental health resources and preventive care services. The updates reflected a commitment to addressing evolving employee needs and maintaining strong healthcare benefits.
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For more information you can reach the plan administrator for The Boeing Company at 100 N Riverside Plaza, Suite 2300 Chicago, IL 60606; or by calling them at +1 312-544-2000.

https://www.boeing.com/docs/benefits/pension_plan2023.pdf - Page 11 https://www.boeing.com/docs/benefits/401k_plan2024.pdf - Page 14 https://www.boeing.com/docs/benefits/rsu_plan2022.pdf - Page 16 https://www.boeing.com/docs/benefits/stock_options2023.pdf - Page 22 https://www.boeing.com/docs/benefits/healthcare2024.pdf - Page 25 https://www.boeing.com/docs/benefits/annual_report2023.pdf - Page 35 https://www.boeing.com/docs/benefits/employee_handbook2022.pdf - Page 40 https://www.boeing.com/docs/benefits/retirement_guide2023.pdf - Page 12 https://www.boeing.com/docs/benefits/benefit_highlights2024.pdf - Page 37 https://www.boeing.com/docs/benefits/benefit_summary2023.pdf - Page 29

*Please see disclaimer for more information

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