Retirees often have to be careful with their money. After all, they don’t have a paycheck coming in any more and they often need to make their savings last.
If you’re out of the workforce and considering spending some of your limited cash on a Costco membership, it’s worth it to think about whether the fees to join are justified. With the price of a membership starting at $60 for a Gold Star membership and jumping to $120 for an Executive Membership, this may not seem like an easy choice.
In reality, though, there are two specific perks Costco offers that could make joining an especially smart personal finance choice for seniors.
1. Discounted prescription drugs
The ability to save on prescription medications is one huge motivator for retirees to join Costco.
According to the Georgetown University Health Policy Institute, among Americans between the ages of 65 and 79, 87% use prescription medications. For those over the age of 80, that number jumps to 91%. The average number of prescriptions filled each year is 20 for 65 to 79 year olds and 22 for those 80 and over.
These medications come at a cost, even with Medicare coverage. Individuals between the ages of 65 and 79 spend an average of $456 per year out of their pockets to cover prescription costs, while those 80 and over have to budget for an average of $510 for meds.
Joining Costco can help seniors cut those costs. The Costco Member Prescription Program makes it possible to save up to 80% on popular medications. That means a typical senior who is spending $456 annually could reduce that amount by as much as $364.80. The prescription savings alone would more than justify the annual membership fee.
Let’s take a look at one popular drug. Celebrex treats rheumatoid arthritis and osteoarthritis — two common ailments in the elderly. The generic version, Celecoxib, was more than $10 cheaper from Costco compared with Target or CVS in multiple markets across different states including Florida, Pennsylvania, and California. The discount on this one med alone covers Costco’s annual fees and then some, assuming you get a 30-day monthly supply.
2. Discounted travel
Travel is a passion for many seniors who have the money, time, and health to see the world. Over half (52%) of seniors ages 50 and up describe travel or vacations as their top priority when it comes to spending their discretionary income. Costco can make those trips less expensive.
The warehouse club offers tons of vacation packages at great prices. When The Ascent compared costs of Costco versus alternatives, there were multiple trips offering savings of $500 or more. Plus, Costco also allows you to earn a 2% cash back reward when you book vacations through Costco Travel if you upgrade to the Executive Membership, which can help lower the cost even more.
These two perks alone are often well worth joining Costco for, especially if you’re like most seniors and tend to spend a lot on medications and vacations.
The good news is, if you aren’t happy with your membership, Costco will also offer a refund at any time. So you can join to see if your prescriptions or destinations are cheaper, and if it turns out you aren’t saving enough to justify your membership fee, you haven’t really lost anything in the end.
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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale and Target. The Motley Fool has a disclosure policy.
These 2 Perks Alone Could Make a Costco Membership Worth It for Seniors was originally published by The Motley Fool
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