It’s no secret that health care is becoming more and more important to most of us as we get older. More diseases are likely to develop, which means more money will be spent on visiting health professionals and buying medicines. Even if you stay healthy in your later years, the cost of care and preparation for possible unexpected health situations increases.
Health-related spending is likely to be one of the biggest components of your retirement budget. You must be willing to pay for comprehensive insurance cover and possible expenses for care.
Here are three strategies to help you manage these critical retirement expenses.
- Understand how Medicare https://www.medicareadvantage2019.org/humana-medicare-advantage-plans-2019
The good news for Americans over the age of 65 is that you qualify for Medicare. This makes dependency on health services more affordable. At the age of 65, most people automatically qualify for Medicare Part A free of charge, primarily for hospitalization and skilled care.
Medicare Part B needs to be purchased (about $ 109 a month in 2017 for most retirees). Part B covers the cost of visiting a doctor, but with some deductibles. Many people buy additional coverage to use for expenses, such as a Part D prescription drug plan or a Medicare supplement policy.
With Medicare, timing is important. Signing up for insurance for the first time will keep costs down. If you have insurance with your employer after the age of 65, you may delay Medicare enrollment without having the risk of late penalties.
If you retire before the age of 65, you must take out insurance in the open market to cover health-related expenses until you are eligible for Medicare. Individual coverage tends to be more expensive as you grow older, so invest the costs in your retirement budget. Some employers offer retirees health insurance as an advantage. Ask your HR department if this option is available to you.
- Assign sufficient funds for the costs of health care
When developing your retirement income strategy, make sure you have access to money for health care that is your responsibility. According to an estimate, the average 66-year-old couple must spend more than half of their pre-employment social security benefits to finance healthcare spending during retirement. Most people are likely to be partially dependent on their own savings to make up for some medical expenses.
Along with other retirement savings, you may want to set up a health savings account (HSA) during your work years. HSAs are designed to use tax-advantaged savings to pay for medical expenses incurred during your working hours. However, any remaining funds can be used for health care later in life, including Medicare and Long Term Care premiums. Note that you must be registered in a high deductible health plan to open an HSA.
- Focus on your own health
One way to keep retirement health costs under control is to create or maintain a healthy lifestyle. Small changes that you make today, such as proper eating or sleep prioritization may reduce the likelihood of medical problems affecting you later in life.
Being physically active can also be beneficial to your retirement finances – according to the American Heart Association, it could help save you $ 500 a year on health-related spending today.
Having a plan does not guarantee that you will avoid health problems, but you can find comfort in knowing how to tackle the costs of retired health care.