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A 65-year-old couple retiring in 2019 can expect to pay about $285,000 in medical costs according to the most recent Fidelity report. Did you think that healthcare would cost you that much? It is a surprising statistic, but one that is important to prepare for.

Healthcare costs are on the minds of many pre-retirees and it’s understandable! As medical costs continue to rise, how can pre-retirees best plan for the price of their health in retirement?

In this blog series, we’re going to cover a few clear questions surrounding health care in retirement, and Medicare coverage. We’ll cover:

  1. Choosing a Medicare plan that works for you.
  2. Working beyond age 65 – and how that impacts your health care.
  3. What you need to know about Medicare supplemental coverage.
 

Let’s do a quick, high-level look at these topics before diving into this new, exciting blog series!

1. Choosing a Medicare Plan That Works For You

Deciding how and where to obtain healthcare is a big decision as a new retiree. It is important that you have a handle on your options, weigh the pros and cons, and come up with a solution that will work best for you and your family.

It is important to have a grasp on Medicare. This system is complex and will come with many changes than what you are used to. While the plan itself is free for enrollment, there are many additional fees you’ll need to be aware of including premiums, deductibles, co-pays, co-insurance, etc. Traditional Medicare (parts A and B) don’t cover many things like dental, vision, prescriptions, at-home care, and more which can lead to gaps in your coverage. Additional Advantage Plans are a way to fill those holes but they come with more fees and out-of-pocket expenses. 

In our upcoming blog series, we’ll be covering the five concrete steps you can take to pick a plan that’s best for you.

2. Working Beyond Age 65

Many Americans work well into their 70s or 80s, especially if they have a job they love. Working longer is often a decision made for financial reasons, but it can also be a way of adding fulfillment and depth to your days as a retiree. However, it’s important to realize that working past the age of 65 impacts your health care needs in retirement.

The truth is, when you work past age 65 (or your spouse continues working past age 65 and maintains healthcare coverage), you have a few different options for health care in retirement:

  1. Enrolling in Medicare Part A.
  2. Balancing supplemental coverage with current healthcare coverage through your employer.
  3. Deciding to only leverage employer healthcare coverage in place of Medicare Part B.
  4. Leveraging Medicare Parts B and/or D in place of employer coverage.
 

Choosing the option that’s right for you and your spouse or partner may feel complex, but we’re going to break it down into easy-to-understand, actionable steps!

3. Supplemental Coverage

We touched on this briefly above, but it is important to factor in the extra costs associated with health care such as prescription medication, trips to the dentist, glasses and vision check-ups, at-home care, and more. Medicare Part D can be added to your plan to cover medications but you’ll need additional Medicare Advantage Plans to help cover the rest. You may want to consider long-term care insurance into your plan as well. 

I encourage you to think about the type of care you feel you will need in retirement and work from there. Know what is most important to you and find a plan that can meet those needs first and foremost. It is important to look at the whole picture when it comes to your health in retirement.

Here at Arnold & Mote Wealth Management, we are invested in your success. It is our passion to help people build a retirement plan they love. Are you wondering how healthcare costs will impact your plan? Schedule a call with us today – and stay tuned for upcoming posts in this blog series about Medicare and healthcare needs in retirement!

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