RETIRING? WHY PLANNING FOR YOUR HEALTHCARE IS IMPORTANT
Healthcare is one of the largest retirement expense to a lot of people. Every year, insurance companies calculate the average cost of medical expenses for a 65-year-old couple retiring during their calendar year. This year, the figure calculated as the average couple requiring two-hundred and eighty thousand dollars to cover their retirement medical expenses noting that the said figure does not include long-term care.
People who are earning average incomes can prepare for health care costs in retirement without stealing from a bank, moving in with their children, or learning to practice medicine by themselves.
Statistics on preparing for death than preparing for poor health in retirement bear this out as it is harder to think about declining health than it is to think about mortality. Knowing the latter is inevitable, since forty-two percent of Americans have a will or estate plan in place, according to a Care.com survey, while the Economic Policy Institute found that only thirty percent of the members have more than a thousand dollars saved for retirement.
Health decline is a fact of life as you continue aging. Three out of every four people over the age of sixty-five have multiple chronic conditions. These are defined as illnesses or medical conditions that last a year or longer and require ongoing medical attention or limit daily activities this is according to the CDC. Every three seniors die with Alzheimer’s or another form of dementia. One out of what is so evil about these medical issues is the fact that dealing with chronic health conditions or dementia can be devastating to a retirement budget says the Alzheimer’s Association reports.
One of the first things to do when approaching retirement is signing up for a health savings account (HSA). This account allows families to contribute up to six thousand nine hundred dollars and individuals to contribute up to three thousand three hundred and fifty dollars in pretax income. Persons above the age of 55 can contribute an additional a thousand dollars above these limits.
The downside of HSAs is that you must have a high-deductible health insurance policy for them to qualify. For one to be considered high-deductible policy, one’s insurance must have a deductible of least $1,350 per individual or $2,700 for a family, and an out-of-pocket maximum that is at most $6,650 per individual plan or $13,300 per family plan which makes the plan a bit of a difficult choice. What is most concerning about the insurance calculation of two hundred and eighty thousand dollars for medical care costs in retirement is the fact that the numbers are based on sixty-five-year-old people meaning that they are eligible for Medicare Medicare costs more than you realize and covers less than you’d expect. It is imperative to understand what Medicare does and does not cover.