As the baby boomer generation approaches retirement, many are concerned about how they will pay for healthcare expenses. This is a legitimate concern, as healthcare costs will likely be one of the largest expenses in retirement for most retirees. As such, it’s critical to be proactive and begin planning early.

The good news is that there are steps you can take to help minimize health care costs in retirement. The first is to recognize that healthcare costs are projected to continue to rise. Your wealth advisor can provide insight into projected cost trends and help you develop a plan that accounts for this.

For example, if you are planning on purchasing Medicare Parts B and D, or supplemental insurance known as Medigap, you can start saving for those premiums in your working years by investing money in a Health Savings Account. This option offers tax advantages and can help reduce out-of-pocket healthcare costs in retirement.

Another step is to make a realistic estimate of how much you will need to cover healthcare expenses in retirement. You can use various resources to help you with this, such as the Milliman Retiree Health Care Cost Index. This index estimates the amount of savings needed at retirement to cover the average retiree’s lifetime healthcare costs.

Lastly, you should try to stay healthy Click to learn and prevent medical problems as much as possible. This may seem like a no-brainer, but staying active and eating well are some of the best ways to hold down healthcare costs in retirement. Regular doctor visits can help you catch potential issues in their early stages, reducing the need for costly treatment later on.

There are a number of things that you can control when it comes to managing healthcare expenses in retirement. You can choose when to retire, where you will live during retirement, and what type of healthcare coverage you purchase. However, there are some factors you will have less control over such as your health status and how long you will live.

It’s also important to start talking about healthcare costs with your wealth advisor at an early stage. While it’s not always a pleasant discussion, it’s one of the most important conversations you can have with your advisor. In addition, your wealth advisor can help you create a budget and savings goal that accounts for your anticipated healthcare needs in retirement. This might mean dropping some of your “wants” and “nice to haves,” such as that extra vacation every year, in order to save for your healthcare needs in retirement.

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