Health care costs, when not properly addressed, can make your retirement savings disappear in a snap.
And this is why, when creating retirement plans, one must not only prepare for leisure or recreational activities. Including health care costs – and solutions on how to deal with these expenses – will allow one to achieve what he or she wants for the future.
We’re sharing some simple yet practical pointers for you to make sure your assets are protected from the said costs. We hope you consider these tips!
A Save and Earn Approach
It isn’t enough to save for retirement – you must also come up with more ways to make money!
With costs on health care and other retirement essentials rising, access to extra funds will always be a sound and logical decision. You’ll never know when you’d need to dip into your assets to pay for medical expenses – having another pool of funds to get money will effectively allow you to protect your nest egg.
One particular reason why a save and earn approach is needed in managing one’s finances was because of the financial crisis that happened last 2009.
As the longest recession since World War II, that particular crisis resulted to most baby boomers to panic, making them sell their assets, hampering their ability to retire comfortably.
And to make up for the lost time, most of these boomers have no choice but to continue working (even during the golden years) to secure funds to pay for retirement costs.
Although there are job opportunities available during retirement (with approximately 19% of individuals age 65 years and above working at least part-time today), one’s wellbeing may be at risk when considering to make ends meet during the twilight years.
As such, earning more money as early as possible is the way to go to protect one’s retirement assets.
Improve on Both Health and Financial Literacy
One of the main reasons why one’s assets are at risks to health care costs is the lack of both financial and medical literacy.
A Prudential Investments survey finding shared in a Business Insider article revealed that 40% of pre-retirees do not know what to do to prepare for retirement.
Accordingly, an Insured Retirement Institute (IRI) study reported a similar statistic: only 55% of the survey’s boomer respondents have set aside money for the golden years.
Combining the lack of financial urgency with inadequate health literacy skills then results to a potent case of having a bleak future. The American Medical Association highlighted the risks of having poor health literacy skills as such:
· Higher mortality rates
· More emergency room visits (many of which are even unnecessary)
· Longer hospital stays
· Non-compliance to medical treatments
These skills, if not improved upon, will be damaging both to one’s health and wealth during the retirement years.
Cover the Health Care Cost Gaps with Medicare Supplements
The best way to face financial and wellness needs during the golden years is by securing Medicare Supplement Insurance Plan coverage.
By addressing the gaps (out-of-pocket health care costs such as copayments, deductibles, and coinsurance charges) in Original Medicare policies, boomers can now then have a more flexible and practical approach to preparing for their future.
Additionally, since private insurance companies sell these plans, applicants have the advantage to shop around the market for a policy that will best suit their needs. Comparing Medicare Supplement Plans, both in terms of price and coverage, is a benefit that one should definitely include in their retirement plans.
Do you have other suggestions on how to protect your retirement assets? Please let us know below.