On average a 65-year-old couple will experience $275,000 plus in health care costs in retirement. That is unless their employer retirement benefits include ongoing coverage and they are able to get supplemental insurance. There are very few companies that provide this benefit, and according to the Kaiser Family Foundation, only 25 percent of large employers offer retiree health coverage. As stated in an article from Forbes, “How To Make Health Insurance Part Of Your Retirement Planning”, health insurance is an important piece of retirement planning. Without it, you can plan to spend a large portion of your retirement savings on medical expenses.
As you work on your retirement plan, here are three steps to take as you consider health insurance:
- Research. There are pros and cons to all insurance options, so make sure you look at your options and take note of the comparisons. While you may qualify for Medicare Part A, it is important to note that Part B could cost you out-of-pocket premiums. Also, remember that without employer supplementation, premiums increase. The same coverage can go from a manageable premium to four times the amount.
- Know your health risks. Identify your health risks and look for insurance options that cover them. If you are in great health and have no health risks and it seems according to your doctor you will stay that way, then maybe considered insurance that is only for covering major medical events. Yet remember, your goal with insurance is to cover as many bases as possible as you don’t want to be caught off guard with huge out-of-pocket expenses that deplete your retirement fund.
- Prepare for the aftermath. You buy life insurance to cover your loved ones in the event of the “worse-case scenario”, your death. Yet, what happens to your spouse and loved ones afterwards? Since you are not sure what could befall you in retirement, and medical bills can easily stack up, having a life insurance policy is prudent, but it must be coupled with a family discussion. Prepare your family for next steps after you pass. Make sure that you have a family member or members who can take over the financial situation after your passing. At Family Estate Planning Law Group, we make sure all our clients have a Family Care MeetingTM where this would be one of the topics addressed. Making sure your family is on the same page is not only crucial to your retirement planning but also your estate planning.
The best retirement plans leave nothing to chance. Therefore, having health insurance is a foundational part you will want in your retirement plan.
Reference: Forbes, (April 5, 2018) “How To Make Health Insurance Part Of Your Retirement Planning”