Broker Check
4 Ways to Manage Your Healthcare Costs in Retirement

4 Ways to Manage Your Healthcare Costs in Retirement

November 18, 2022

Many retirees are surprised to learn that Medicare does not cover 100 percent of their healthcare costs in retirement. Yes, in addition to Part B premiums, you will still be responsible for deductibles, copayments, and some uncovered expenses. And because healthcare can become a considerable expense after age 65, you should carefully consider different methods of managing those expenses.

Participate in enrollment periods each year. Another fact that surprises many Medicare enrollees is how many options are available to them. Each year during the Annual Election Period from October 15 to December 7, you have the opportunity to compare different Medicare plans and select one that best meets your needs.

Then, during the Medicare Advantage Open Enrollment Period from January 1 to March 31, those enrolled in a Medicare Advantage plan have a second opportunity to investigate other options.

Even if you like your current Medicare plan, it is always a good idea to do some comparison shopping at these times. An even better deal could be available to you.

Consider supplementary insurance. Because Medicare doesn’t cover everything you might need, supplementary insurance is available to help you manage additional expenses. A Medigap plan, for example, can help with the cost of copayments and deductibles. A Part D plan can help with the cost of prescriptions, for those on Original Medicare. Supplementary plans for things like dental or vision care are also available.

Save money in a health savings account now. If you’re eligible to save money in a health savings account now, that account could work as a secondary retirement planning account. That’s because money in the account that is not used each year can roll over to the following year and go with you into retirement. Then the withdrawals are not taxed when the money is used for qualified healthcare expenses (even your Medicare premiums).

Consider long-term care insurance. At some point, you might need long-term nursing care. According to Genworth, the cost of a stay in a nursing home can approach $8,000 per month for a semi-private room. Purchasing long-term care during your 50s can help you obtain affordable premiums in exchange for the security of knowing you’ll be able to access this care later on when you need it.

Planning for retirement involves investigating many different angles, and the cost of healthcare is an important one. Call us to schedule an appointment, and we will discuss your needs and concerns in more detail.