According to Fidelity’s most recent study on health care in retirement, the average 65-year-old couple can expect to spend nearly $280,000 on out-of-pocket health care costs in retirement.1 Think that estimate sounds high? Consider that you will likely have to pay for things like premiums, copays, deductibles and more.
 
Many retirees assume that Medicare will pay for most or all of their health care costs. However, that’s usually not the case. Your Medicare coverage depends on your specific options. The more robust your coverage, the higher your premiums are likely to be. And some treatments, such as long-term care and rehabilitation, aren’t covered by Medicare at all.
 
If you haven’t planned for your health care needs in retirement, now may be the time to do so. Fortunately, there are steps you can take to minimize your risk exposure and perhaps reduce your out-of-pocket costs. Below are a few tips to help you get started:

Be a proactive, informed patient.
 
They say prevention is the best medicine, and that’s certainly true in retirement. If you’re approaching retirement, now may be a good time to consult with your physician about your current health and what you can do to minimize risk. For instance, perhaps you could improve your diet or exercise routine. Maybe you should undergo that long-delayed procedure now so you won’t have to deal with it in retirement. Think about what you can do to improve your health.
 
You can also be more proactive when it comes to treatments and services. Once you’re on Medicare, don’t be afraid to ask which tests and procedures are necessary and how they relate to your symptoms. After all, you’ll likely have to pay at least something for much of your care, in the form of either copays or deductibles. Don’t hesitate to ask which services are truly necessary and which aren’t.

Review your Medicare options.

Medicare coverage is offered in a variety of different programs known as “parts.” Part A is standard for every retiree and is free. It covers hospitalizations and inpatient services. Part B covers doctor visits and outpatient care. Part D covers prescription drugs.
 
Part C is an innovative program also known as Medicare Advantage. It allows private insurers to offer coverage that includes traditional Medicare protection but also enhanced coverage. These policies may offer flexibility with deductibles or premiums and often provide protection for services not traditionally covered by Medicare, such as dental visits or eye care.
 
Take time to choose the Medicare package that best fits your needs. While you can’t predict your future health, you can make an educated decision based on your medical history. If you have a chronic condition or need regular care, robust coverage may be best for you.

Use a health savings account (HSA) to fund your out-of-pocket costs.
 
You’ll likely have some level of out-of-pocket medical expenses that you’ll need to fund with your retirement savings. However, you can use a unique tool to save for those costs on a tax-advantaged basis.
 
An HSA allows you to make tax-deductible contributions and then increase your funds on a tax-deferred basis. If you use the money for qualified health care costs, you can take tax-free distributions. That means you can start saving today to pay for your medical expenses in the future, and you can do so in a tax-favored manner.
 
Ready to plan your health care strategy? Let’s talk about it. Contact us today at Safe Retirement Strategies. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.
 
1https://www.fidelity.com/viewpoints/personal-finance/plan-for-rising-health-care-costs
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
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​Social Security is a valuable resource for retirees. According to the Social Security Administration, 90 percent of all Americans over age 65 rely on Social Security benefits for income. In fact, 50 percent of married retirees and 71 percent of singles say they count on Social Security for more than half of their retirement income.1
 
If you’re like most retirees, Social Security will play a significant role in your financial picture. As you approach retirement, you’ll likely have to make important decisions about when to file and how much income you will need beyond your Social Security benefit.
 
Without a solid strategy in place, you could face financial challenges. You may even be unable to fund the kind of retirement you’d like for yourself. Below are a few common Social Security mistakes. If you can avoid these, you’ll minimize your risk and save yourself some financial headaches.

Early benefits while working.
 
You can file for benefits as early as age 62. In fact, many retirees do file for benefits as soon as possible even though it usually means a reduction in benefits. If you file before your full retirement age (FRA), you could see your benefits reduced as much as 35 percent.2
 
However, that reduction could be far greater if you file for benefits while you’re still working. If you file before the year of your FRA, Social Security allows you to earn as much as $17,040 with no penalty. However, your benefit is reduced by $1 for every $2 you earn past that threshold.3 You can file at your FRA and continue working and see no reduction in benefits.

Expecting too much income.
 
Think Social Security will fund your retirement? Think again. While Social Security is a helpful resource, for most people it’s not enough to cover all expenses. The average monthly Social Security benefit is just over $1,300. In fact, Social Security benefits are capped at nearly $2,700.4
 
It’s likely that you’ll need some income above and beyond your Social Security benefit. This income could come from savings and investments, a pension or possibly even part-time work. If you don’t know where your additional income will come from, now may be the time to develop a strategy.

Forgetting about Medicare premiums.
 
Medicare is another valuable resource for retirees. The Medicare program offers several different types of coverage, known as “parts.” Part A, which is standard and free for all retirees, covers hospitalizations and emergency treatments. Part B covers doctor visits and outpatient services, while Part C offers supplemental coverage and Part D covers prescription drugs.
 
It’s important to remember that Part A is the only coverage that does not have a premium. All the other parts do have premiums, which are usually paid out of your Social Security benefit. Be sure to get an estimate of those premiums before you file so you can project your net Social Security benefit and budget accordingly.
 
Ready to plan your Social Security strategy? Let’s talk about it. Contact us today at Safe Retirement Strategies. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.
 
1https://www.ssa.gov/news/press/factsheets/basicfact-alt.pdf
2https://www.ssa.gov/planners/retire/agereduction.html
3https://www.ssa.gov/planners/retire/whileworking.html
4https://www.fool.com/retirement/2016/12/04/25-social-security-facts-figures-you-need-to-see.aspx
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
The material is not intended to be legal or tax advice. The insurance agent can provide information, but not advice related to social security benefits. Clients should seek guidance from the Social Security Administration regarding their particular situation. The insurance agent may be able to identify potential retirement income gaps and may introduce insurance products, such as an annuity, as a potential solution. Social Security benefit payout rates can and will change at the sole discretion of the Social Security Administration. For more information, please consult a local Social Security Administration office, or visit www.ssa.gov
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