One of the many challenges retirees face are health care costs. Medicare is a good option to have, but it won’t cover all of your medical costs. A 65 year old couple who retired a few years ago will need more than $ 220K to cover out-of-pocket medical expenses during retirement. This number doesn’t take into consideration the costs of any nursing home care either. It’s very important to be educated on health care costs so you can manage your savings in a valuable way to ensure your wealth lasts through retirement. Here are 5 ways to save money on health expenses in retirement:
Enroll in a fee-for-service Medicare supplement insurance plan known as Medigap. Medigap can help pay some of the health care costs that original Medicare doesn’t cover, like copayments, coinsurance, and deductibles. Some Mediagap policies will even pay for medical care outside of the United States, which is important with the Ebola scare going on right now.
In order to get a Medigap policy, you need to already have Medicare Parts A and B. There’s also a monthly premium for Medigap, and it only covers one person, so your spouse would have to buy a separate policy if they want coverage.
Medigap does not cover vision or dental care, hearing-aids, or long-term care. Medigap plans sold after 1/1/06 does not include prescription drug coverage either.
Enroll in Medicare Part D
Knowing that Medigap does not cover prescription drugs, join a Medicare prescription drug plan, also known as Medicare Part D.
Most Part D plans have a coverage gap, also called the donut hole. This means there’s a temporary limit on what the drug plan will cover for drugs. However, savings are still available. You get these savings if you buy your prescriptions at a pharmacy or order them through the mail. The discount will come off of the price that your plans has set with the pharmacy for that specific drug.
Save Big Money on Prescriptions
When it comes to prescription drugs, consider switching from brand-name drugs to generics. Another way to save is to order prescriptions by the bulk. If a drug is available in a 90-day supply as opposed to a monthly supply, ask your pharmacy if they offer discounts on bulk orders.
Choose the right pharmacy. A 2013 study by Consumer Reports found that Costco’s pharmacy had the lowest retail prices overall for prescription drugs, while CVS had the highest.
Live an Active, Healthy Lifestyle
The American Heart Association reports that physically active people save $500 a year in health care costs because they have fewer visits to the doctor and limited medical bills.
Increase your physical activity by simply taking a 30-minute walk each day to increase your heart health. Improve your diet and eating habits, and don’t smoke!
Plan early for end-of-life care.
Create a living will. This legal document will give your loved ones a set of written instructions that tell them what actions to take if you’re no longer able to make decisions due to illness or incapacity.
Next, consider buying long-term care insurance. LTC will usually cover home care, assisted living, hospice care, nursing homes and more.
Retirement planning shouldn’t feel like you are studying for an exam, but at the same time if you aren’t aware of the right and wrong moves to make, you could cost yourself a whole lot of money and miss out on big opportunities to save.
You need to find a financial planner who knows the ins and outs of retirement planning including health care and the costs associated with it.
If you live in the Everett, WA area and would like to learn more about planning for your retirement, contact a local Everett WA Retirement Planner.