Planning for Health Care in Retirement
Planning For Health Care In Retirement
Today's almost-retirees are confident about what the future holds, but if there's one thing that could create some worry, it's the cost of health care.
Am I right!?
However, planning for retirement health care is easier than you might expect, so no need to fret my friend!
We know there are a lot of large, chilling numbers being thrown around out there. But let's be honest, no matter what numbers you’re adding up to last you over the course of 30 years—food, gas, vacations—it's going to seem like a substantial number.
It is important to plan for healthcare, too, given that your healthcare costs will be a relatively stable piece of your retirement-spending pie. Why not make it easy to plan for?
SunRiver Villas Retirement Community is here to give you some pointers on Planning For Health Care In Retirement:
Factors To Consider For Health Care Costs in Retirement
Your health care costs in retirement will bank on a few important factors.
In addition to the amount of money you are already planning to save for all your retirement needs, SunRiver Villas Retirement Community has gathered 5 essential factors that will specifically aid you in planning for Health Care Costs In Retirement:
HEALTH STATUS
It may come as no surprise, but of course, the worse your health is when you enter retirement, the more you can expect to spend on healthcare. Here are some factors to consider:
Are you a smoker?
Do you have 2 or more chronic health conditions?
What do your eating habits consist of?
How often are you moving? Are you getting the daily exercise you need?
Do you visit the doctor often (at least 10 times a year)?
If you answer "yes" to at least one question or the answers to those questions may not be exactly what you know they should be, you should plan to spend a larger portion of your retirement income on health care.
However, if you are leading a healthy diet and exercise regime, you can plan on saving just a little bit less!
Keep in mind though, regardless of your answers, you should still set a considerable amount of money just for healthcare, simply because healthcare costs are rising. As we reach older ages, health problems can naturally occur, and it’s best to plan for those occasions too.
AGE OF RETIREMENT
Who wouldn’t want to retire early, am I right?!
Despite this attractive idea, retiring before age 65 could mean you may have to come up with other coverage until you're eligible for Medicare, and that could get a wee bit expensive!
No need to worry, there are some ways to get by until you are eligible for medicare.
One example could be staying on your spouse's plan if your spouse is still working by the time you retire.
You may also eligible for COBRA coverage– if you retire within 18 months before you become eligible for Medicare, you can use COBRA coverage to bridge the gap.
You’ll also want to take advantage of a health savings account while you are still working. If you are covered under a high deductible health plan, you can save for future health care costs in a health savings account (HSA).
The money that you put into HSAs lowers your current taxable income, grows tax-deferred, usually offers a matching program, and comes out of your account tax-free as long as you use it for health-related expenses.
Last but not least, you could look for insurance on the open market or through a professional association. According to Vanguard, all states now have exchanges where you can buy coverage from private insurers, and many associations offer group insurance coverage.
Unfortunately, though, this is likely your most expensive option unless you qualify for tax credits.
LOCATION
Your location in which you decide to retire will play a huge factor in your healthcare costs to come, whether that is your health insurance, premiums, medicare, doctors visits, or medical costs in general.
You can get started comparing insurance plans and prices by using an online marketplace, which can vary based on what location you reside in. You may also want to work directly with an insurance broker.
Choose your retirement location wisely– not just for a beautiful place to retire and live out your life, but also for the cost of your retirement.
Health Care Costs Will Change Over Time
Yes, you heard it here first! It is often said that the cost of health care is rising faster than the overall inflation rate, and that's true! But hey, better technology and newer treatments hit the market every day, and that's a good thing, right?!
It’s safe to bet that you can expect health care spending to double over the first 20 years of retirement, simply because most retirees will spend more money on health care the older they get.
As well, other expenses like entertainment and travel tend to drop over time. In fact, most people spend less overall the further they get into retirement.
Home Care Costs in Retirement
Another very real, and yet sometimes unexpected expense in retirement is where you choose to reside. You don’t want to empty your retirement funds by making mortgage payments and paying for home care services.
So no matter where you choose to retire, plan on setting money aside to care for that home.
This can be done by either choosing to retire in the home you live in now, but work to pay off your mortgage before retirement, or by buying off a home in, perhaps, a retirement community.
Either way, you want to work to have your mortgage paid off before retirement because this is often quite a money-sucker.
There are many advantages to choosing a retirement community, which provides free year-round activities and access to clubs, social groups, gyms, pools, and fitness classes, as well as access to a maintenance staff and lawn care team whenever something goes wrong in the home!
Unexpected home repairs can definitely have an impact on your retirement savings, so you’ll want to set aside an adequate amount of funds simply for that.
As a resident of SunRiver Active Adult Communities, you automatically have access to all the facilities—not to mention all the friends and enjoyment that comes with them. The 35,000+ sq ft SunRiver St. George community center links the walking and cart paths to open areas, the golf course, tennis courts, and pickleball courts.
SunRiver Villas is home to its own exclusive community center and amenities including a lap pool, fitness center, test kitchen and computer center—along with access to SunRiver’s 18-hole championship golf course.
Not to mention, regular lawn maintenance, and maintenance staff available for your every need, so you never have to worry about mustering up the funds for expensive fixes again!
Planning For Health Care In Retirement, as well as having a money management plan, will ensure that your retirement funds will last you through this amazing time, and SunRiver Villas is here to help you do it!
Resources:
https://www.nerdwallet.com/blog/investing/what-will-you-spend-on-health-care-costs-in-retirement/
https://investor.vanguard.com/retirement/planning/health-care
https://www.thebalance.com/retire-early-and-lower-your-health-care-costs-4152065
