How much should couples plan to spend on retirement health care costs? According to Fidelity Investments, they should set aside a little nest egg of – brace yourselves – $240,000! This shows why it is so important for adults, both young and older, to start thinking about health care costs now.
Here are a few ways to prepare for retirement health care costs:
1. Start saving now. Open a Health Savings Account to save funds for retirement. There are many benefits to HSAs but these accounts allow individuals between the ages of 55 and 65 to save an extra $1,000 a year in the HSA account.
For more detailed information, read GoHealth’s previous blog post on HSAs.
2. Determine whether you need additional coverage. Medicare Advantage and Medicare Supplement plans may cost a little more out-of-pocket initially but typically provide more benefits than Original Medicare.
3. Understand health care reform benefits. Due to the Affordable Care Act, seniors can utilize preventive care without a copayment or out-of-pocket charge to them. But, if a procedure is provided during the same visit as the preventive visit, then seniors may get charged. Always ask your doctor questions before receiving treatment to avoid surprising bills later down the road.
4. Don’t be afraid to compare your Medicare options every year. Each year during the Medicare open enrollment period, health insurers offer new plans, get rid of older ones and can raise premiums. This is the time to compare your options to try to get a plan with a lower copayment, deductible or better hospital network.
5. Understand what health insurance and Medicare covers. Many consumers need to consider purchasing long term care for nursing home and hospice costs. While no one knows whether or not they will need long term care, this type of care is expensive so purchasing insurance for it will help with those costs down the road.