How much should a person save for healthcare and medical expenses in retirement? To give you an idea, a 65-year-old couple retiring in 2020 could expect to spend nearly $300,000 throughout their retirement on these expenses alone. This does not include costs related to long-term care facilities or in-home health care services, which range anywhere from $20,000 to well over $100,000.
While most people plan for retirement in some form, healthcare costs are often under-appreciated and poorly accounted for. If you want to enjoy a healthier retirement, here are some steps you can take now to help safeguard your future.
Step 1: Invest in a Professional Savings Plan
It isn’t enough to simply put money away for retirement in hopes of achieving financial independence in your golden years. For the best results possible — and the peace of mind you need — meet with a financial advisor. He or she will create a comprehensive profile of your unique medical expenses, help you determine an accurate dollar amount to save, and devise a savings plan that fits your current budget.
Step 2: Open a Separate Savings Account
It does not matter how serious you are about saving money; it is hard to refrain from spending, especially when emergency expenses come out of nowhere. Experts recommend that you combat this problem by opening a separate savings account.
To begin, simply open a designated savings account at your local bank, or you can set up a Health Savings Account (HSA) through your healthcare insurance carrier.
An HSA allows you to set money aside specifically for future healthcare costs. You can make withdrawals any time on a tax-free basis so long as the funds are used to pay for medical expenses. Money that remains in the account gains interest, providing you with a growing healthcare fund.
Step 3: Purchase Long-Term Care Insurance
Did you know that 70% of Americans age 65 and over will require long-term care services? Did you know that Medicare does not typically cover this expense?
Whether you plan to reside in a retirement community or employ in-home healthcare assistance, long-term care insurance will ensure that the costs are covered. If you purchase a long-term care insurance plan between the ages of 50 and 60, you can get highly affordable rates.
Step 4: Take Care of Yourself
This might go without saying, but one of the best ways to prepare for future medical expenses is to take care of yourself now. Routine checkups, a healthy diet, regular exercise, and therapies like cryotherapy can go a long way towards reducing future health problems and associated costs. If you’re very serious, you might go the extra mile by reducing or eliminating use of tobacco and alcohol.
If you want to enjoy your retirement to the fullest, then preparing for your future medical needs is a must. Although the needs of each person vary, the good news is that following these four steps can save a significant amount of cash for almost everyone.
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Where do all these bills for medical care for the elderly come from? I’m old. I have Medicare and Medicare Part B taken out of my Social Security payment each month. I have a Humana drug plan for $17. a month paid from my credit card so I get the miles each month. Since going on Medicare I’ve received excellent health care from my usual doctors, a few specialists, a couple of emergency room visits for stitching up cuts and never received a bill from anyone. What am I missing? Maybe if you need one of those $8,000. a month medications, but I don’t know how many people do. In that case I’d start looking for a break on the price. I’d contact the society for that particular disease, write to the company producing the drugs, write personally to the president of the company producing that drug, have my doctor get me in a clinical trial where the drug is free, shop for price and help.
Great tips, as usual, Karen! Thank you.