Help Me Retire: We’re in our 60s, my husband plans to work until he ‘drops dead’ and our medical bills are overwhelming – how can we retire like this?

Then by the time she was 18 and got disability, I began having symptoms, diagnosed with several overlapping incurable diagnoses in my 40s. I’m now 60, my husband is 64. We live alone, own our own house which is almost paid off, have a 401(k) and two other retirement accounts but not a great deal saved considering. 

We save every penny we can but medical bills, medications never end. How can anyone prepare or save with all this going on?

My husband plans to work until he drops dead or they make him retire! What choice is there?

And to think, for about the first 15 years of our life we thought we were healthy, and then all of a sudden life for us all changed forever.

See: In debt and retired? How to pay it off – or keep it, if you can

Dear reader, 

I’m so sorry to hear of your stressful situation. You’re so right, something like a diagnosis can come about unexpectedly, when everyone thinks all is well and fine. It is wonderful to hear that you have a home you’re almost done paying off and have some retirement accounts, even if it isn’t enough for you both right now. 

The situation you’re in sounds very overwhelming, but know that you are not alone. So many Americans – especially in the last two years during the pandemic – have been thrust into a similar scenario as you, where they were making ends meet and suddenly were thrown into a tailspin because of an illness, a loved one’s illness, a lost job and so on. 

Even still, it’s possible to plan and prepare for retirement. It will take a lot of work, it may even be emotional, but it’s possible – and you can do it. 

First, just like with any other goal or major life event, there needs to be a full assessment of cash flow and assets. Look over what accounts and debts you currently have, how much money comes in, how much you absolutely need to spend, and all of the money that goes out. Think about what anticipated income sources you may have in retirement, such as Social Security benefits, any pensions, and what your withdrawals could be at the minimum from your retirement accounts. 

“A lot of folks get really overwhelmed and try to do a lot of math in their head,” said Morgan Hill, chief executive officer of Hill and Hill Financial. He suggests having a written plan – along with analyzing current cash flow and expenses, to make projections for the future. “What I find is this gives some sense of hope.” Not only does this exercise give you a clear view of your financial picture, but it can also spark some ideas for how to make more cash or pay down debts. 

Now, on to the medical bills specifically. First, review every single bill you receive – sometimes there can be mistakes. Then, and you may know this already but it is worth saying for those who do not, try to have those balances lowered. 

Medical bills, unlike most other types of debt, can be negotiated, and hospitals and other medical facilities may be willing to work with patients on a repayment plan. Whether you’re talking to your insurance company, your doctor’s office or the medical institution you received a procedure, be honest about what you are able to afford. 

Also, research what that medical service actually costs – you can use Healthcare Bluebook or FAIR Health, two databases, as well as Medicare.gov, to look up prices for those services in your location. The same is true of medications – you can use databases like GoodRx and SingleCare to compare drug prices. These websites provide transparency and a leg up in negotiations if you’re being overcharged. 

Want more actionable tips for your retirement savings journey? Read MarketWatch’s “Retirement Hacks” column

There may be a patient advocate at a hospital you can speak with to help with your financial issues. And you can ask someone at your insurance company to review all of your claims and help find the proper strategies. Credit counselors may also be able to provide assistance, though you should always vet the professionals you’re working with first.

Here’s what you shouldn’t do – take money out of your retirement accounts to pay these bills, said Linda Erickson, a certified financial planner and founding partner of Erickson Advisors. “Under no circumstances should the couple take money out of their retirement plan or IRAs to pay medical bills,” Erickson said. “Retirement assets are generally protected from creditors, and they should not deplete those accounts in the event they might have to declare bankruptcy.” 

You also shouldn’t put these medical bills on credit cards, said Ralph Bender, a certified financial planner at Enduring Wealth Advisors. “Work directly with the providers to get them paid and make monthly payments in whatever amount is possible,” he said. “Medical bills rarely charge any interest. Credit cards make their money by charging high rates, and using them can cause a downward spiral.” 

Know what other benefits are available to you, too. For example, you can claim an income tax deduction on medical bills that exceed 7.5% of your adjusted gross income. The expenses can only be deducted to the extent you itemize, and you would take either the greater of your itemized deductions or the standard deduction (which in 2021 was $25,100 for married couples filing jointly), said Thomas Scanlon, a certified financial planner at Raymond James Financial Services. Other common deductions include state and local taxes, mortgage interest and charitable donations. 

Also see: I’m 68, my husband is terminally ill, and his $3 million estate will go to his son. I want to spend the rest of my days traveling – will I have enough money?

Delaying Social Security for as long as you both can will also increase the benefit you’ll eventually get every month. Of course, if your husband ends up retiring before age 70, you might need to claim, but if he intends to work for so much longer, a delay in benefits will keep you from seeing any reductions or taxes on those checks. 

Reverse mortgages are another route to consider. Here’s more information on how reverse mortgages work. 

Lastly, you mentioned your husband’s plan is to work until he dies or is forced to retire. In either instance, try your best to plan for when he’s no longer working, even if it means bringing in other family members to discuss. And try to find a fresh perspective on working, if possible. There is a lot of stigma around working in retirement, or not having retired by a certain date or age, Hill said. 

Read: Think you’ll stop working in your 60s? Get real

It’s not a failure to be working in your 60s or 70s, especially when you and your loved ones are doing the best you can to pay your bills and keep yourselves healthy and afloat. Having focused conversations, like many Americans are having now in light of the coronavirus, will only help you in the future. 

Readers: Do you have suggestions for this reader? Add them in the comments below.

Have a question about your own retirement savings? Email us at HelpMeRetire@marketwatch.com