The Impact of Health Care on Financial Planning for Retirement

When we think of retirement, we often think of slowing down, taking it easy, traveling and having time for our gardens and out grandchildren.  This is something lovely to look forward to, but in order to achieve this picture or whatever the particular, personal picture you have in your mind, it is important to prepare in advance.
We include many things in our plans for retirement, such as savings accounts, life insurance, investments and other important assets.  However, many of us have not thought of the role that our health and out health care costs will play in our retirement.

It is critical that we factor in health care expenses, as they could drastically change what our retirement picture actually looks like.  It is true that Medicare is available, however to plan for the long-term we will need more than that.  We will need to supplement our basic Medicare benefits so that we can pay for health care expenses that Medicare does not cover.

For instance, in the event that you needed long term care or an operation that was considered major surgery or a short (or longer) stay in a nursing home, how much would it cost us out-of-pocket and out of our retirement dream?  It is hard to come up with specific figures, since medical costs continue to rise and there seems to be no end in sight.

Since we cannot actually calculate the cost, there is still something we can do to prepare, especially while we are still working and at least somewhat healthy.  Even if we have stopped working and are beginning or in the middle of retirement, there are still things we can do to offset the financial impact of an unforeseen accident, illness or hospital stay.  The sooner we look into this, the better.

There are excellent Medicare Supplement policies  on the market.  There are many to choose from and various companies that you can purchase them through.  It is important to investigate Long Term Care policies and Medicare Supplements – especially Part D, which covers prescriptions initially up to $2,500 – are important to compare.  Look at annuities, which can often be used to offset health care expenses.  Even one small annuity can help..

It is never too late to start, and it is essential to at least ask some questions and do some research.  It is estimated that the average retiree will spend between $150,000 and $250,000 in medical and health-related expenses, yet most people at pre-retirement have saved up less than $25,000.

Whether you are already retired, getting ready to retire, or you are still working with a few years to go, start gathering information and using it to plan.  You can begin by going to legitimate web sites, such as www.medicare.gov , www.medicaid.gov , www.ssa.gov , www.cms.gov , and the AARP website at www.AARP.org . 

Don’t be caught off guard.  Start exploring options and asking questions now.  Be prepared for your retirement so that the retirement you picture becomes a reality.