Retirement is a pretty picture in our heads. However, for it to be a stress-free retirement without too much debt, you need plenty of planning. Planning for healthcare in retirement is a major portion of this exercise.
Planning for Healthcare in Retirement
Healthcare, although often ignored, is a large line item in your budget. Before retirement, and with a good insurance coverage, you may not feel the weight of the costs on your budget. However, in retirement, this picture drastically changes. The costs can sometimes get intimidating and keep you wondering about all the consumer debt you might be accumulating. In the different stage of retirement, you need different kinds of planning.
According to Vanguard professionals here’s how the costs may differ in each stage:
- Early retirement. Spending often stays high during the early years of retirement. Many retirees travel and eat out more often. Health care coverage shifts from employer-sponsored insurance to Medicare.
- Middle retirement. Overall spending often drops to its lowest point during the second phase of retirement. Retirees in this phase spend more time closer to home. They’re active in their communities and with their families but aren’t spending their funds on expensive vacations. Health care costs may rise as these retirees age.
- Late retirement. During the late years of retirement, retirees are faced with more health issues. As a result, health care costs peak. If retirees need long-term care, these costs can be substantial.
Make Sure You Have as Much Information When Planning for Healthcare in Retirement
Predicting medical costs for the future is next to impossible. However, you do know your history. Therefore, start with your current costs. Add up the past doctor bills, insurance premiums, etc. to get an initial idea of your costs. How would your payments to insurance change when you retire? What type of deductibles, co-pays, and insurance do you currently pay? The aggregate view of all of these will give you a basic idea of your future medical costs.
In the meantime, stay healthy. Eat healthy meals, exercise regularly and keep a fresh mind! A healthier retirement is potentially a low-cost retirement too!
For financial assistance, speak with a certified counselor at ACCC today! Call 800-769-3571.