How to Start Planning for Health Care Costs in Retirement

The cost of healthcare is slowly on the rise. In this kind of health climate, now is definitely the time to start thinking about your retirement and, more importantly, the cost. When considering retirement, many individuals forget to include the cost of healthcare in their overall plan. This is usually because they’re used to paying a lower amount because of health subsidies from their employers.

What everyone should remember is that you won't have those benefits once you retire, though there are federal programs that help lower costs. It’s possible you’ll be expected to pay a higher out-of-pocket cost for your health care, not to mention you’ll need to choose the right coverage plan. Your health is your most important asset, and now is the time to start saving. If you ’re retiring in the near future, here are a few points you need to consider to prepare for health costs.

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Consider Medicare--

Understanding what is Medicare and how to get it is a given when it comes to planning for retirement. It is one of the best federal programs, and while you may think this is something you don’t need to worry about, it’s best to prepare early. Take the time to become familiar with the Medicare plans and consider which coverage you’ll most likely need during retirement.

Medicare is not a one-and-done situation. After you retire, you can revisit your Medicare plan every year to make sure you are receiving the coverage you need under Parts A, B, C, and D. The plan you choose when you retire might not be the best for you later in life. Always be aware of the treatment you are receiving and compare it to the coverage you selected. Your doctor can help direct you towards a Medicare plan that will cover your needs.

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Factoring Health Costs--

While you may not know exactly how much money you will need in retirement, there are plenty of ways to get a good quote on how much you should have when you retire. There are multiple websites that offer health costs calculators so you can figure out how much to start saving. These calculators will take in consideration your age, gender, and health to give you an estimate on what you will be spending on health care.

Of course, this isn’t set in stone, there could be an unpredictable illness that could cost you. Choosing from one of the low-cost health insurance companies that help seniors find affordable care is a good way to be prepared for anything.

However, money isn’t the only thing that could help you plan for health care costs in retirement. Choosing to take care of your body now will lower the likelihood you needing to spend excess money on healthcare in the future.

Health Savings Account (HSA)--

Before retirement consider opening an HSA (Health Savings Account). These kinds of accounts are available for individuals with a high-deductible health plan and no other health insurance. HSAs have minimum options for your annual contribution, but you might not always have to tackle that limit on your own.

If you’re still employed, you might only have to put a certain amount of money into your HSA while your employer places a portion as well. Even better, the money you place into this fund is tax-deductible (up to the HSA contribution minimum) and any interest earned on the account is tax-free as well.  

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Unpaid Care Options--

Another factor that could influence your plan for health care costs in retirement is taking into consideration your unpaid care options. If you were to need care, is there a source in your life that could support you? For instance, could you rely on your children or family to care for you if you were to need additional assistance?

These are hard questions, but ones you’ll need to tackle realistically. When considering health costs for retirement, talk to your family about facility care, in-home living solutions, and other options. The answer could affect your retirement plan, so take the time to think about what you would like to happen in this instance.

Thinking about retirement is an extremely important part of preparing for your golden years. Taking the steps to secure your financial future now can tremendously help you in the future, especially when it comes to health costs. Remember to consider all your options for saving to secure a strong, healthy tomorrow.