If your retirement period is near, you may be thinking of how you will spend your free time after retirement. The majority of people often plan to use this time for pleasure activities. However, most people fail to consider that as one gets older, health care issues usually set in. Many retirees fail in this aspect of health care cost consideration because they don’t include it in their budget while planning for retirement. The primary reason why many fail to include health care costs in their retirement savings plan is that they don’t usually see their medical expenses while they are employed; since these expenses are covered by their employer. However, you need to include your medical expenses after retirement in your budget because you will be responsible for your health care costs when you retire. Some financial experts recommend setting aside about $300,000 for medical expenses when you retire, but this amount is not realizable for many Americans. If you have not been saving for your health care costs, you need to understand how to plan for these costs and what you should do to avoid medical and financial instability in the future. Use The Health Savings Account The Health Savings Account (HSA) is similar to the 401(k) retirement account, but its withdrawal is tax-free suppose you want to pay for your health care costs. With HSA, you can defer taxes on your investment. If you are not 65 years, you need to understand that you will pay the penalty if you withdraw from your HSA for non-healthcare purposes. Your HSA is your second account during retirement because you can withdraw for any purpose once you are 65. Think About Long-Term Care Considering when you can no longer stay or care for yourself is a challenging thought for most people. Still, many seniors will need long-term care, which can be expensive in the future. It would help if you bought insurance to cover your long-term care to minimize this cost. With this policy, the insurance company will cover your long-term care costs while you pay premiums to the company. The insurance lasts for your entire lifetime. You might consider buying a life insurance policy together with a long-term care policy. You can use the death benefit to cover additional health care costs with the life insurance policy. Know How Different Medicare Plans Work Medicare is a health insurance program provided by the federal government for seniors aged 65 and above. Medicare has various plans, which can be complicated, but the first thing to note is that it doesn’t cover your long-term care. Medicare Part A covers hospital stays, hospital insurance, and a bit of home care. It does not require a monthly premium payment if you pay Medicare taxes while working. Medicare Part B has a standard premium payment to be paid monthly, and it covers medical insurance, certain medical supplies, outpatient care, and preventive services. Medicare Part D covers recommended vaccines and other prescription drugs. Medicare Advantage entails all the above Medicare plans and serves as an alternative. Private companies offer this plan. You can get extra coverage for vision and dental under the Medicare advantage plan, while Original Medicare doesn’t cover this additional coverage. There is a projection that health care costs will increase, and you may need more money to pay your medical expenses during retirement. You can reduce your health care costs by engaging in beneficial exercise, eating a healthy diet, and visiting your doctor for regular checkups. Conclusion Many people don’t consider their long-term health care costs when making a retirement plan. But these health care costs will soon become a reality as you get older. Therefore, you should plan for your future medical expenses. You can save for long-term care using a Health Savings Account (HSA) or buy the right insurance policy. Ask experts about Medicare coverage to know the extra expenses not covered by Medicare.
Contact Information:
Email: [email protected]
Phone: 4022508277
Bio:
Carl Wyllie is an advisor focused in areas of Medicare, retirement, estate planning, and crisis planning. Carl works with individuals of all ages in planning for their retirement. He is uniquely effective in building working relationships between their families and elder care law attorneys to assist them in avoiding a healthcare crisis. Carl is particularly sensitive to helping provide the means for his clients to maintain their independence and dignity when a change in their health occurs due to the natural aging process.
