One of your largest retirement expenses could be your healthcare costs. An average 65-year-old couple retiring today will need an estimated $300,000 to cover their healthcare costs, according to a recent study.1 Although good health is priceless, it could cost you in retirement. First, know what you can do during the Medicare Fall Open Enrollment period.
You Can Switch From Original Medicare to Medicare Advantage
Original Medicare consists of Part A, which covers hospital stays, skilled nursing facility care, and some nursing home care2, and Part B, which covers most doctor services, outpatient therapy, and Durable Medical Equipment.3 Many retirees also have supplemental Medicare Advantage insurance to cover services not covered by Parts A and B, such as long-term care, dental, vision, dentures, hearing aids, and foot care. During open enrollment period, you can switch from just receiving Parts A and B to also purchasing a Medicare Advantage plan.
You Can Switch Your Medicare Advantage Plan
You can review other Medicare Advantage Plans until December 7th and decide whether or not you will keep your current one. There may be reasons you want to switch Medicare Advantage plans. For example, if you’ve moved to another state or developed a medical condition and need to see new specialists, you may want to change to a different plan.
You Can Change Your Part D Prescription Drug Plan
If your prescription drug needs have changed in the last year, a different Part D prescription drug plan might work better for you. The same drug cost can vary widely between plans, and plans can change the list of drugs they cover each year. During Open Enrollment season, you have the option to compare different plans, see what pharmacies are in-network, and consider if your needs have changed.
Consider Long-Term Care Costs
One healthcare cost that is easy but possibly detrimental to overlook is long-term care. According to government estimates, someone turning 65 today has an almost 70% chance of needing long-term care later in life.4 When you consider that the median annual cost of an assisted living facility is $51,600 and the median annual cost for a private room in a nursing home is over $105,850,5 covering long-term care costs is a major feat. Medicare and Medicaid typically don’t cover costs, and paying with funds from a traditional 401(k) or IRA can trigger a larger tax burden.
We live in a constantly changing world, and the traditional strategies that once served retirees may no longer apply. If we see a national digital currency, continued inflation, and persistent low interest rates, you may need to re-examine your retirement game plan. We can help you prepare for the future, no matter what it holds. We help people create comprehensive retirement plans that are tailored to their unique needs – Schedule a time to meet with us to discuss your financial concerns and plans for the future.
- How to Plan for Rising Health Care Costs
- What Part A Covers
- Part B Costs
- How Much Care Will You Need?
- 100 Must-Know Statistics About Long-Term Care: Pandemic Edition
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