Health insurance is one key benefit you can get from your employer in addition to access to a 401(k) plan or other retirement savings vehicle.
Indeed, retirement and health care costs tend to go together. Once you're ready to exit the workforce and kick back, you also won't have coverage from your employer. You may be thinking this isn't a problem because you can qualify for Medicare and use your nest egg to cover expenses that aren't taken care of by government medical coverage.
However, you are more likely to have health concerns as you age, which means you could very quickly run through your funds. Long-term care expenses, which represent major, ongoing costs for many seniors, are not covered by Medicare parts A or B. Plus, hearing aid exams and fittings, most dental care, eye examinations related to prescribing glasses and dentures are also not covered.
With these considerations in mind, here are three tips for tackling these costs.
- Look into Medigap policies and Medicare parts C and D. Many government-approved private insurers offer Medicare supplement plans, which are often called Medigap. These policies cover the expenses that aren't taken care of under original Medicare alone. There are also Medicare parts C and D, which are Medicare Advantage and the prescription drug plan, respectively. Just remember the additional coverage requires you pay a premium each month.
- Consider long-term care insurance. This type of care refers to assistance provided so seniors can handle basic daily activities, including bathing and dressing. Long-term care can be provided in your home, a nursing facility or an assisted living facility. Over time, costs of these services can add up, which is why long-term care insurance exists. These policies cover long-term care expenses, thereby protecting your retirement funds and alleviating some of the financial burden on your family members.
- Factor expenses not covered by Medicare into your nest egg. Whether retirement is a few years down the road or a decade away, begin thinking about health care costs while saving for the golden years. This includes adjusting your income planning strategies. If you do require long-term care, for instance, the added cost will require you have more money available for your bills each month. You can speak with one of our financial planners if you need assistance adjusting your retirement plan around health care costs.
For more information on effective wealth management strategies, contact Landmark Bank.
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