Healthcare Considerations for Those Over 65 and Retired: Planning for Your Future
Investor Warren Buffett once said, “Someone’s sitting in the shade today because someone planted a tree a long time ago.” You can put your best foot forward in retirement by understanding and budgeting your actual and projected healthcare costs.
Your health status and lifestyle in retirement may affect your healthcare spending significantly. A health savings account and/or long-term care insurance can help to manage some of the risk associated with these expenses. However, these items can be expensive and may not be available to everyone.
You can plan for a potential increase in healthcare Healthcare considerations for those over 65 and retired costs by creating a budget and estimating your annual costs. This includes prescriptions, insurance premiums and deductibles, out-of-pocket expenses, and services not included in traditional Medicare (such as dental, vision and hearing). You can also estimate how much your Medicare benefits will cost over time by using the Milliman Health Cost Estimator to get an idea of what your monthly premium will be in 2020 and 2025. You can use this data to compare the cost of traditional Medicare with other alternatives, such as Medicare Advantage and private insurers offering Medigap plans.
Whether you are retiring before age 65 or transitioning from employer-sponsored retiree health coverage, it is important to understand how you will maintain health insurance until you become eligible for Medicare. There are several options, including continuing your current coverage through COBRA or state continuation, your spouse’s retiree health coverage, and the state health insurance marketplace.
Medicare’s Part A and Part B premiums and deductibles are standardized by state, but the out-of-pocket costs can vary greatly. In addition, your location can impact the cost of healthcare in retirement. The Medicare website shows how costs vary by state for both Original Medicare, Medicare Advantage and Medigap.
You should also think about how you want to spend your retirement years. Will you travel, work part-time or stay home and take on some volunteer work? These activities may be less taxing on your body and will help to keep you mentally active. It is also important to keep up with physical activity and try to maintain a healthy diet in order to improve your mental and physical wellbeing.
Finally, it is important to have a plan for what you will do should your health decline in the future. This may include living in a nursing home or other facility that provides skilled care. By taking these steps, you can reduce the possibility of a financial crisis in your later years and have more peace of mind in retirement. Remember, it is never too late to make changes to your lifestyle that may benefit your health. Taking a realistic look at your health and healthcare needs in retirement, budgeting accordingly, and making sound investments can give you a more enjoyable and financially secure future. The right planning can allow you to focus on the things that are most important to you.