When it comes to determining your readiness for health care costs in retirement, there are a few things you should consider from the start. If you are in your 50’s and 60’s and wondering if you are ready for your health care costs, then you’ve come to the right place.
So, how much will your health care cost? According to Fidelity, in 2020 a couple will need $295,000 in today’s currency to cover long-term care and health care expenses. However, depending on important factors like your health, income, and Medicare eligibility, this number could be very different. Though this high number could frighten a few readers, there are still things you can do to prepare for these costs while in retirement. So, what should you do if your health care savings need a boost?
Health Care Costs and Preparing for the Worst
Save for Health Care Costs in a Tax-Free Account
A wonderful way to begin preparing for your health care expenses is to contribute to a Health Savings Account (HSA). This type of account permits you to make financial contributions while receiving a tax deduction. If the money you invest is later used for qualifying health care expenses, the withdrawal is tax-free. Individuals may contribute up to $3,600 as of 2021.
Prepare for Long-Term Care
Paying for long-term care in retirement is an important consideration. If you want to do this right, you should consult a Care Coordinator to help you develop the best long-term care plan you can. Your coordinator will help advocate for you, help you navigate the complex health care system, and assist you in goals regarding wellness.
This is monumentally important because Medicare Part A only covers skilled nursing for a period of time following a hospital stay. Additionally, Medicare Part A doesn’t cover custodial care which means should you or your partner lose the ability to care for themselves, those care costs would not be covered. This is why many people invest in a long-term care plan.
By planning for long-term care well ahead of when you will need it, you can preserve your retirement savings and protect yourself against devastating illness. Read this article to learn more about the cost of care.
Where You Live Makes a Difference
Though traditional Medicare is the same everywhere, parts C and D can vary greatly depending on where you live. The cost of long-term care can also vary, sometimes by thousands of dollars, depending on the state in which you live. If you are currently living in a place where long-term care and health care costs are high, it might be worth it in the long run to relocate.
Consider Your Retirement Age
As we have discussed before, there are about 7 Questions to Ask Yourself About Full Retirement Age. Whether you are considering retiring early or you want to wait a little longer, there are important considerations you should take into account when it comes to full retirement age.
It should come as no surprise that those who are the most prepared for retirement have spoken to a professional at some point in their retirement journey. Financial planning is not a fixed activity as your needs and finances will change over time. Because of this, it is essential to review your retirement plan often and revise it as changes occur.
Want to learn how to choose a decision-maker? Check out this article.
Don’t let the future catch you off guard and start planning today with this FREE eBook, Plan the Future for You and Your Spouse’s Long-Term Care.
Confident Living is a continuing care at home membership program, focused on helping you remain active and independent as you age in your own home. We serve the greater Cincinnati area. For more information, contact us online or call (513) 719-3522.