The quality of your health will have a tremendous impact on the quality of your life in retirement. Keeping up on your healthcare needs is part of protecting and maintaining your health so you can enjoy your life. Of course, that can get to be pretty expensive, especially if you’re living on a fixed income. So how do you make sure you can fulfill your healthcare needs in retirement?
“Expensive” and “healthcare” often get stuck side by side. If you retired as a married couple at age 65 in 2019, you could expect to pay roughly $285,000 in healthcare expenses throughout your retirement. That cost is likely to only increase. That’s probably not going to ever change, so take matters into your own hands and start saving now. Consider using an HSA to set aside savings for healthcare costs. These accounts use pretax dollars, neither your contributions nor accrued interest are taxed, and making withdrawals for medical expenses isn’t taxed either. There is a cap on how much you can contribute each year, but the money you don’t spend each year stays into the account. The roll-over aspect of an HSA is one of the main differences between it and an FSA.
Medicare Advantage, sometimes called Medicare Part C, is a Medicare plan that covers both Part A, which covers hospital insurance, and part B, which covers medical insurance. It doesn’t include Part D, which covers prescription drug costs. It’s important to add Part D coverage to your Medicare Advantage plan early on. If you don’t add Part D to your Medicare Advantage plan to start, you might lack prescription drug coverage later. Considering the cost associated with many prescription drugs, some of which are literally life saving, it’s good to add if you think you’ll need it.
Long-Term Care Insurance
For a variety of reasons, retirees may find themselves in need of long-term care. Medicare doesn’t cover the cost of this care, so you’ll need to find another option. Consider that the cost of a home health aid can be over $50,000 annually, while the annual cost of a private room in an assisted living facility can be twice that. Long-term care insurance can help offset some of those costs and make getting the care you need more affordable.
It’s important to take care of your health in retirement. Having the right financial support allows you to do just that. Start saving now so you can build up your own funds. Consider getting a Medicare Advantage plan and weigh the benefits of purchasing long-term care insurance. This can help you have the tools you need to fulfill your healthcare needs in retirement.