Retirement is meant to be a time of fun and relaxation. Enjoying your retirement is not possible, however, without the health and security that healthcare provides. You can plan how you will pay for the costs of healthcare without stress if you make sure to do so in advance, as well as make use of the many resources available to retirees and future retirees.
Use Your Savings
The most important thing you can do to prepare for healthcare costs is to start saving now, and the first step is simply to start an account with which to save. Most full-time jobs include a 401k plan, but this plan focuses mainly on savings for a retiree’s living expenses. Health savings accounts (HSA) are specifically designed for medical savings and for that reason are tax-exempt, making them a great option to consider. Regardless, having an account to set a certain amount of your income aside will encourage you, in the long run, to actually fill it with something.
Medicare and Medicaid
As long as you’ve worked at least 10 years in the United States, you will qualify for Medicare, health insurance for people 65 years and older, or those permanently disabled. Once you have Medicare, they will pay 80 percent of your bills after you pay a premium (about $140 a month). Most individuals also purchase a supplement to cover the 20 percent that Medicare does not, which averages around $125 a month more. For those with very low income, Medicaid can cover many long-term care costs in retirement.
Add a Living Benefit
Another option for paying your healthcare bills is to sign up for a life insurance policy now with a living benefit, which allows a person to use the policy’s death benefit for serious medical bills. For example, a person that has a $500,000 living benefit policy and incurs $200,000 of serious medical costs can then draw out that cost from their death benefit to pay it. Though this should not be your go-to plan, it is a great one to fall back on if you do have large healthcare costs later down the road.
For most of a person’s life, they are working hard towards prosperity and health. During retirement, you will want to rest easy knowing any costs your health demands can be covered. Looking into the different options available to you at whatever stage of life you are currently in will help you to meet the future more prepared.
Read this next: What Is the Outlook for Millennial Retirement?