Going into retirement fully informed about health care costs and other expenses will help you avoid surprises. Ultimately, you want to be able to protect your lifestyle and avoid being forced back into the workplace just to stay afloat. Here are seven ways you can better control medical costs:
- BUDGET: Create a target retirement savings goal that factors in your planned level of expenses and life expectancy. This should include entertainment expenses, travel costs to see family members and your other interests.
- MEDICAL SAVINGS: Consider creating a separate savings account. Rather than just saving for retirement in general, individuals could use a Health Savings Account or designate a portion of their retirement account to be dedicated to health care costs.
- MEDICARE: Be sure you understand what Medicare will cover and what it won't. For instance, the majority of people 65 or older likely will need long-term care at some point. Create a plan to pay for such care, keeping in mind that Medicare generally does not cover such costs.
- INSURANCE: Investigate the cost of supplemental health insurance, which reimburses individuals 65 and older for some or all of the costs not covered by Medicare. The Web site www.medicare.gov, along with many state sites, lists the supplemental health plans available, including those for Medicare Part D.
- PHASED RETIREMENT: It may be necessary to work longer. The additional earnings that come from gradually entering retirement, first with part-time work, can help ensure that savings aren't tapped too soon for health care needs.
- PREVENTIVE CARE: Staying on top of routine doctor- recommended screenings for diseases such as colon cancer can help control costs.
- HEALTH CLAIMS: Mistakes can happen in the claims payment process. Take the time to review medical bills and follow up with the doctor's office when questions arise.