Addressing the ‘menopause tax:’ A guide for advisors with female clients

The “menopause tax” doesn’t typically appear in a financial plan until it’s already underway. It’s not one big expense but the accumulation of smaller, recurring costs.

“A doctor appointment here, a prescription change there, follow-up visits, and ongoing trial-and-error care," said Danielle K. Roberts, founding partner of Boomer Benefits. "None of it looks alarming on its own, but over time, it pushes out-of-pocket spending higher than what most projections ever accounted for.”

Since menopause has historically been treated as a short-term, minor issue, it hasn’t been built into retirement models as a sustained driver of healthcare costs.

This has led to underestimating the ongoing, multi-year impact on out-of-pocket spending. Advisors must acknowledge this and take action to ensure their clients are adequately prepared.

There are a variety of expenses that many women have to cover as they go through menopause.

In most cases, there isn’t one significant expense. It’s the accumulation of multiple expenses that can become overwhelming, especially for those who are unprepared.

Continued specialist care, hormone treatment and monitoring, mental health services, over-the-counter supplements, prescription costs, and metabolic care can all add up quickly.

“Unfortunately, most menopause-related costs aren’t fully covered by insurance, and they don’t disappear quickly. They just get added to a client’s monthly spend,” Roberts explained.

How to plan for menopause-related expenses

Culturally, the “menopause tax” has been a taboo topic until recently.

“Fortunately, women are now speaking up, and there’s been progress to help understand the medical and financial impacts of menopause," said Angie Welsh, founder and president of My Annuity Agents. "Advisors can set themselves apart by tactfully addressing this issue and including it as part of a broader financial plan.”

The key is to start the conversation early. If you wait to discuss menopause-related spending until a client is about to retire or enroll in Medicare, advisors say you’re reacting to a pattern instead of planning for it.

Additionally, this shouldn’t be treated as a standalone conversation about menopause. Instead, it should be part of a broader discussion about future healthcare spending and income stability.

“The best window to start planning is when a woman is in her late 30s through early 50s. This is when there’s still room to adjust assumptions,” Roberts said.

It’s essential to understand that all healthcare costs, including those related to menopause, don’t move in a straight line. They can be unpredictable.

“Midlife is often where you can see variability, so financial projections need more flexibility and a bit more margin for periods of higher spending or even income disruption,” Roberts added.

There is no single magic bullet solution to ensure clients have enough funds to pay for menopause expenses. However, there are several that can help ease the financial burden.

'As much as possible'

Health Savings Accounts (HSAs) are one of the most practical tools to help pay for menopause expenses. They give clients a tax-advantaged way to cover out-of-pocket costs, including costs insurance doesn’t fully pick up.

“Make sure to let clients know they’re unable to contribute to HSAs when enrolled in Medicare, so it's best to contribute as much as possible while they're eligible,” Roberts said.

Once Medicare comes into play, plan choices matter a lot more than people expect. Medicare Supplement plans help smooth out costs by covering many of the gaps in Original Medicare with predictable monthly premiums.

Medicare Advantage plans, on the other hand, offer lower costs up front with more of a pay-as-you-go structure, but the plan’s built-in maximum out-of-pocket (MOOP) also puts a ceiling on healthcare costs.

Welsh recommended additional strategies to help clients with the menopause tax and other hidden healthcare expenses.

“Encourage them to establish liquid assets to pay for out-of-pocket costs," Welsh added. "They can also use annuities to create lifetime income and reduce the stress of income planning during retirement."

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