3 Effective Tips to Help You Tackle High Healthcare Costs during Retirement
Retirement brings with it a whole host of feelings. Certain people feel the joy of finally having time for themselves whereas others can be left feeling inadequate when they no longer have a job demanding their time and attention.
While these factors are difficult to foresee, the common factor (and in fact the most important one to consider) is the desire for financial security and the need for retirement planning. When planning for retirement, it is imperative to provision for skyrocketing health care costs that sum up the majority of the expenses as you get older.
It can be a daunting task to predict the necessary medical expenses to ensure financial stability when the need arises for future healthcare, considering the role certain variables such as interest rates, current health, residence, income and inflation will play. The fact that you no longer receive healthcare benefits from an employer will also make a difference.
How Can You Deal With Your Retirement Healthcare Costs?
It’s hard to predict the future, but what brings some solace is knowing the necessary steps that can be taken well in advance, to best prepare for anticipated health care cost in retirement. The following 3 steps make it easier to avoid high health care costs during retirement:
- Learn about Your Medicare Coverage – Medicare is primarily a health care insurance administered by the US federal government and covers on average up to 51 percent of total health care expenses during retirement. A monthly premium is paid for the coverage, specifically Medicare Parts B and D for retirees.
Part B covers services from your health care provider such as preventive and mental health, besides the necessary laboratory tests, x-rays and ambulance services, whereas Part D covers prescription drugs. It is necessary to note that dental, vision and hearing are not covered by Medicare, hence investing in an additional insurance policy to cover such expenses is ideal.
- Consider Medicare Cost Estimations – Even though Social security provides a solid base for retirement, it is bound to be insufficient for funding both heathcare costs and personal expenditure or living expenses. The premiums for Part B and D Medicare can eat into most of your social security, and vary depending on your income level (the higher your income, the higher the premium), health, longevity, gender and zip code.
The US health care system puts a huge price tag on health, considering that on average the retirement health care insurance premium can cost a supposed couple around $266,000, and this premium will only rise with time, as will medical expenses with rising inflation rates.
- Finalizing a Plan to Prepare for Future Expenses – Being prepared with a solid plan is vital, in order to make sure there is enough of a provision to take care of all the necessary expenses post-retirement, whether medical or general.
With a clearer understanding of what is really covered when it comes to Medicare and the overall exposure to Medicare costs, it becomes a little easier to evaluate how much money in additional investments or savings will be required to simply cover healthcare costs.
It’s possible that the United States healthcare system plans to make sure people adopt a healthier lifestyle early on, to better prepare for their health in retirement. Also, saving more money and making investments for healthcare needs before retirement opens up more options for the future.
A little planning now, combined with the above considerations will help you assess the minimum that should be saved for a healthy and carefree retirement!