How to Make Sure Your Retirement Planning Covers Healthcare CostsDavid Macino
The combination of losing steady income, and incurring more healthcare costs as you age, is one that strikes fear into the hearts of many retirees. With a fixed income and the need for more frequent care, you may wonder how you’ll pay your medical bills. Even in great physical health, there may come an emergency that sets your budget back. Thankfully, you can enjoy your golden years without fearing healthcare costs.
Accurately Calculate Healthcare Costs
Many retirees find themselves in difficult positions because they fail to plan for just how much healthcare will cost. Most companies pay about 75 percent of healthcare coverage for employees. The other 25 percent often comes straight out of the employee’s paycheck. This makes many believe they will do fine with the same amount of money they currently make each month while in retirement. They forget that in fact they will have to cover 100 percent of the costs. Keep this in mind when formulating your savings plan.
Factor in Healthcare Premiums
The next step in budgeting for healthcare during retirement is calculating the premiums you will most likely have. There are four main types that arise during retirement:
- Medicare Part B – In 2016, this was $120 per month. It increases if your income rises.
- Medigap – Coverage to supplement gaps in Medicare coverage.
- Medicare Part D – Provides drug coverage.
- Long-term care – Medicare does not cover most long-term care expenses. You may need to purchase additional insurance.
Calculate your annual premiums along with out-of-pocket healthcare costs to figure out exactly how much you will need to put away during retirement planning. Use a tool like the free AARP Healthcare Costs Calculator to help you with this process.
Make Healthcare Costs Part of Your Retirement Plan
Do not assume you’ll be in good health, your insurance will cover the costs, or you’ll be able to scrape together enough to pay for medical bills during retirement.
The only way to safeguard your future and enjoy total peace of mind is to plan ahead for healthcare costs. Once you calculate how much you may spend in healthcare each year and account for inflation, factor this number into your retirement savings plan. Help offset healthcare costs in retirement by staying healthy, planning ahead, and working with a financial professional.
Call Macino Financial Services 419-491-0909 today to schedule your free retirement plan consultation!
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