Help Prepare for Health Care Expenses in Retirement Part 1
By Saghir Aslam
Rawalpindi, Pakistan
(The following information is provided solely to educate the Muslim community about investing and financial planning. It is hoped that the Ummah will benefit from this effort through greater financial empowerment, enabling the community to live with dignity and fulfill their moral obligations towards charitable activities)
No two people spend the same amount on health care costs in retirement, which is exactly why developing your own approach for this expense is a key part of an effective retirement planning process.
Knowing your expected health care costs and coverage options gives you a better chance for meeting those obligations throughout your retirement—so you can stay focused on the excitement of what come next.
Estimate your costs.
Numbers vary widely ( one recent study found that those at age 70 can expect to spend roughly $122,000 on health care through the end of their lives, although some can expect to spend nearly five times that amount). The right number for healthy, active people can sometimes be counterintuitive. “For example, your health care costs in retirement can be greater if you’re healthier,” “since you get treatment over a longer lifespan.”
A financial advisor may be able to get you a more accurate estimate with a healthcare costs assessment that analyzes expected Medicare-covered costs, out-of-pocket costs, and other expenses.
Determine your expected health care benefits.
Few employers continue benefits into retirement, so you will need to explore your coverage options if you aren’t yet 65 and eligible for Medicare. (Employment trends like the increasing prevalence of freelance and contract work, and the overall rise in the gig economy, may mean that you’re self-insured and already have insight into that expense.)
Even if you are eligible, you need to determine what the government will pay. Research your Medicare options online. “Pay attention to the details.” “Medicare might not cover what you expect.”
Some examples:
- Medicare may pay only a portion of costs for people staying in a rehabilitation center or nursing facility, and there are restrictions on what is covered.
- Coverage is limited to certain skilled care procedures performed by a registered nurse or doctor, such as intravenous injections and physical therapy. It also doesn’t cover the cost of procedures such as routine dental care and hearing exams.
- Procedures done to improve your appearance without a medical need are not covered.
Researching your medication coverage. “Before you retire, ask your pharmacy for a Medicare Part D report,” Larson says. “They’ll provide a rundown of what your medications will cost in retirement and how much is covered for the various Part D options.”
(Saghir A. Aslam only explains strategies and formulas that he has been using. He is merely providing information, and NO ADVICE is given. Mr Aslam does not endorse or recommend any broker, brokerage firm, or any investment at all, nor does he suggest that anyone will earn a profit when or if they purchase stocks, bonds or any other investments. All stocks or investment vehicles mentioned are for illustrative purposes only. Mr Aslam is not an attorney, accountant, real estate broker, stockbroker, investment advisor or certified financial planner. Mr Aslam does not have anything for sale.)
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