For Mark Roberts’ Use: No one wants to face a healthcare crisis during their retirement years (or at any other time). We face many choices with regard to preventing serious illness, such as exercising regularly, eating a balanced diet, or avoiding problematic behaviors like smoking. But despite healthy lifestyle choices, some things are still out of our control.
One thing you can control, however, is the financial impact of a serious illness. As you transition into retirement, closely examine the options available to you, particularly with regard to various forms of insurance.
Supplemental insurance. Retirees are often shocked at the gaps in their Medicare coverage. Contrary to common belief, Medicare does not cover all of your healthcare costs – not even close! Not only will you pay a premium for Part B coverage, you will still have to worry about deductibles, co-pays, the cost of equipment and prescriptions, and more. If you plan to travel frequently, you might be dismayed to learn that Medicare often does not cover healthcare bills in foreign countries.
Medigap plans and Medicare Advantage plans are designed to cover some of these gaps in coverage, but each plan is structured differently. Medicare Part D addresses prescription drug costs. Meeting with an insurance professional as you plan for retirement can help you learn about the different health insurance options available to you.
Keep in mind that the average couple can expect to spend about $280,000 on healthcare over the course of their retirement years. Identifying the right insurance options can help you keep that cost manageable.
Long-term care insurance. It might also surprise you to learn that Medicare pays only a small amount toward nursing care facilities. If you’re age 65 or older, you stand a 70 percent chance of needing long-term nursing care for some period of time, and budgeting for this type of care can wreak havoc on even a well-planned retirement budget.
Long-term care insurance is one option, but look carefully at each plan’s exclusions and limitations (and plan around those too). Alternately, you can establish a savings strategy to address this potential need. An estate planning attorney can help you protect assets in the event that you need to utilize Medicaid to pay for the cost of care.
As you continue to plan for retirement, let’s discuss these issues in further detail at your next appointment. We need to address the cost of healthcare, with regard to your retirement income, so that we can make sure all bases are covered as you enter the next stage of your life.