When preparing for retirement many people overlook the true cost of healthcare. However, healthcare expenses will make up a very large cost for those in retirement. For many it will be the largest expense they will incur over the course of retirement. To ensure a proper retirement plan, here are three things you can do to help prepare a retirement plan that factors in healthcare costs:
1: Educate yourself on how Medicare will work with your retirement plan:
It’s easy when you are in 40 or 50s to take your current costs and health for granted, but that changes as you get older. A recent study has shown that those 65 and over see a greater than 20 percent increase than those aged 52-65 for regarding whether or not they feel knowledgeable regarding basic Medicare coverage. With Medicare eligibility starting at 65, there are obviously many people who are receiving their education after the fact instead of being prepared when the times comes. Make sure you understand how Medicare costs and coverage will impact your retirement plan.
2: Make longevity a factor when preparing a retirement plan:
The average life-expectancy for Americans continues to rise, a long-term trend that is expected to continue into the future. Part of the rise in life-expectancy can be correlated to progress in medicine and healthcare. However, this also means that health-care costs will rise for those that live longer, because they will be paying for them over a longer period time. It is vital when preparing any retirement plan to create sustainable sources of income for old age, not just the beginning years of retirement. Healthcare costs, costs of living, and other factors all need to be accounted for in a manner that can provide protection throughout an individuals journey through retirement…hopefully it will be a long journey, and that’s the best way to plan for it. Running out of money retirement can be a disaster than can be avoided with proper planning.
3: Consider working in retirement:
Continuing to lead a vital life, both at home and through a career or passion after retirement is a path that many Boomers have and will take. Some will continue to work through choice, some will do so because it makes the most economic sense for them. The idea that retirement is a time to live idly is one that just doesn’t fit with many Boomers. This is an area where a financial advisor can help you explore how working in retirement can impact your Social Security and your long term retirement plan, including the funding of health care costs.
America’s Retirement Store is conducting a free workshop on August 25th and August 27th: Health, Healthcare and Retirement. If you are interested in learning more about Medicare, planning for long term health care or preparing a retirement plan that includes anticipated health costs, go here to learn more.