During most of your working life, leading up to retirement, housing might be your largest monthly expense. During retirement, the situation often changes, with health care becoming the biggest financial burden you face. Several factors come together to create an uncertain situation for retirees:
- the cost of health care rises each year, currently outpacing the general rate of inflation
- as you grow older, you are more likely to face more significant health problems – along with the associated expenses
- people are living longer life spans than ever – great news, except this means you will live on your retirement savings longer, and likely experience more health problems
- the cost of long-term nursing care is high, and difficult for many retirees to afford
- regular changes to Medicare policy mean that coverage and premiums can differ from one year to the next, meaning many retirees aren’t sure what to expect from the public health program
- Medicare will cover about 51 percent of health care expenses, meaning you will be responsible for about half of your bills
So what can you do to reduce out-of-pocket medical expenses in retirement?
Take care of your health now. The development of many health problems can be postponed, or completely prevented, by eating a healthy diet, exercising regularly, seeing your doctor for regular preventive care, and quitting smoking and other health-harming habits. Take these steps now so that you can enjoy better health – and hopefully lower medical bills – throughout your life.
Prepare for medical expenses. Early retirement planning, learning good budgeting habits, paying down your debts, and timing your retirement to the best of your ability can help you establish a more secure retirement income. Set yourself up for success by taking these steps now and throughout your retirement years.
Investigate your insurance options. Medicare supplemental insurance, long-term care insurance, and other insurance options can help you manage your out-of-pocket medical spending. Contact us for more information on the variety of insurance products designed to help you enjoy a more stable retirement.