Healthcare In Retirement Is Expensive – Start Planning In Your 40s

Healthcare In Retirement Is Expensive

While retirement may not be something that you’re thinking about in your 40s, it’s the right time to plan ahead and that includes planning for your healthcare costs in retirement. While you may already be contributing to a 401(k), it’s important to also take into account the potential healthcare costs that you may need to pay throughout your retirement years.

If you have an HSA, take advantage of it by contributing to it. You can take advantage of the tax advantages of these accounts, and you can utilize the funds for your healthcare both before you retire and during your retirement so that you can leave your retirement funds solely for your retirement spending. 

You’ll also need to plan for the fact that by the time you retire, healthcare costs will likely be higher than they currently are now. Working with a financial planner can help you to plan out multiple scenarios, for example, if you were to become disabled or unable to work, or if healthcare costs increased by specific percentages, so that you can plan ahead for what might potentially happen in the future based on potential scenarios, your specific health situation and other factors.

Plan for Medicare and Life or Long Term Care Insurance

It helps to plan ahead, both for what Medicare plans you may participate in and what life or long-term care insurance you might need to fill in the gaps. Medicare is not cost-free, and you may need supplemental Medicare insurance to cover your costs. Medicare also won’t cover any long-term nursing home or assistant living needs that you may have, so look into obtaining a long-term care insurance policy as part of your financial plan. Often it is less expensive to purchase these plans while you’re healthier and younger, so it’s important to make these decisions now. You may also want to look into obtaining life insurance that covers chronic illness so that you have additional coverage if you need it. 

While you’re in the middle part of your life, do your best to take care of the health that you do have, to set yourself up for success later in your life. Do what you can to prevent having to spend more money and effort later on down the road, by taking preventative steps today for your health and wellness.