Healthcare Retirement Planning

As one of the biggest expenses in retirement, saving for healthcare is a crucial step. Despite the fact that most of us spend our lives saving away for retirement, many retirees aren’t mentally or financially prepared for the high cost of medical expenses that can occur in retirement.

Here’s why healthcare retirement planning is so important:

As you age, you’re more prone to health issues. Generations continue to outlive those before them—and with this longevity comes the chance for health problems to arise and the potential for additional medical intervention. Stay on top of your health as you prepare for retirement, setting aside the time to make sure you’re taking care of your overall well-being. Consider what preventative steps you can take today to keep yourself happy and healthy for the future.

Prescription costs are on the rise. A 2021 AARP report found that prescription drug prices continue to increase, outpacing general inflation. To adequately prepare for inflation that will occur during your retirement years, it’s vital to start saving now—and to make sure that you’re in good shape for whatever the future holds.

Medicare won’t cover everything. Many people assume that Medicare will cover all health care costs in retirement, but it often doesn’t. According to a Fidelity study, 15% of the average retiree’s annual expenses will be used for healthcare-related expenses, including Medicare premiums and out-of-pocket expenses—so having some extra savings or investing in a supplemental or long term care insurance policy will go a long way in making sure you can pay medical bills, copays, and premiums with ease.

More and more Americans are retiring early. The average age of retirement in the United States is 62—but Medicare eligibility doesn’t begin until the age of 65. For those who retire before Medicare kicks in, it’s important to have some extra retirement savings or another form of healthcare coverage for any healthcare costs that may arise in the meantime.

Healthcare in retirement can be a bit more complicated than pre-retirement life—but we’re here to help you navigate the process with ease.

Switching from your employer’s healthcare plan to Medicare. For many people, moving from your employer’s health insurance to Medicare will be one of the most important retirement transitions—but it can come with questions and confusion.

The key is to sign up for Medicare at the right time to ensure that you don’t have to pay any late-enrollment penalties or face risky gaps in coverage. Medicare requires that retirees sign up during a seven-month Initial Enrollment Period: the three months before, the month of, and the three months following your 65th birthday. If you miss this window, you’ll face late-enrollment penalties for life. (Marking your calendar today isn’t a bad idea.)

The other common challenge seniors face is significant gaps in their health insurance coverage while waiting for Medicare to kick in or for their eligibility status to change. If you retire before the age of 65 and need to find an interim insurance plan, consider the following options:

• Stay on your spouse or partner’s plan. If your spouse or partner has employer-sponsored insurance coverage, this tends to be the cheapest—and easiest!—way to stay insured until you can transition to Medicare.
• Stay on your former employer’s plan. Seniors who retire within 18 months of becoming eligible for Medicare can use COBRA coverage to bridge the gap. Although it’ll be the same coverage you had throughout your employment, remember that your employer won’t subsidize it so your costs will increase.
• Buy insurance through the open market. Although this is likely your most expensive option, buying insurance coverage from private insurers is another potential route to consider. 

Understanding the upcoming health care costs. Your healthcare costs in retirement will also depend on several factors, including your health status, your location, the age you retire, the Medicare plans you choose, your income, and the amount your employer will subsidize. Take stock of this and make an estimate of the savings you’ll need post-retirement.

Considering long-term care insurance. Medicare doesn’t cover long-term care, a significant expense that some seniors may need. Long-term care, defined as ongoing help with daily activities, can last several months or years. It’s designed for seniors who aren’t expected to recover fully, or to live without some level of care.

Dementia, stroke, Parkinson’s disease, and osteoarthritis are common reasons that seniors may require long-term care—so considering whether you have a family history of these conditions can be a helpful starting point in determining how to move forward.

Earlier is better when it comes to healthcare retirement planning. As you consider how to plan for healthcare in retirement, take some time to understand the costs, including what Medicare covers and what it doesn’t.

When employers still contribute the majority of healthcare costs, it’s easy to forget that once you transition to retirement, you’ll be responsible for paying your health care premiums in addition to out-of-pocket costs.

One common out-of-pocket expense is long-term care, which isn’t covered by Medicare. It’s incredibly difficult to predict exactly how much care you may need in the future—and how much it will cost—so saving for long-term care can be a bit complicated. Some seniors may need very little, while others may need thousands of dollars each year to cover in-home nursing, nursing home care, or memory care. If you wait until these needs become imminent, it’s often too late.

The best strategy and health advice for seniors is to plan ahead early with a long-term insurance product that sets you up well to meet your needs—whatever they may be—in the future. With an insurance policy, you’ll pay a monthly premium toward long-term care for either a specified amount of time or for the remainder of your lifetime.

Your golden years are the perfect phase of life to relax and spend your time in all of your favorite ways—with Everdays, we offer health advice for senior citizens, and we’ll help you with healthcare retirement planning so you don’t have to stress or worry about future expenses.

We’ll walk you through the process, step-by-step.

Our friendly Bot Eva will guide you through your health and care planning process from start to finish while offering the best health advice for seniors. Simply answer a few simple questions about your healthcare preferences and directives for the future, and we’ll turn your decisions into a complete plan that’s easy to share with your loved ones. We’ll also help you discover the best ways to address your current and future healthcare needs.

With Everdays, you’ll be able to:

• Determine your current health needs and long-term care preferences. Eva will help you make a plan for the future by selecting the right insurance plans for you. In the event you lose any activities of daily living and need medical, nursing, or in-home care down the road, you’ll be well prepared. 
• Capture your final wishes. Make decisions about your funeral, memorial, or celebration of life. Identify who you want to be there and what you want them to do—so loved ones know exactly how to honor your life, whenever that time comes. 
• Give your family and loved ones peace of mind. With a sharable digital plan, your loved ones will have access to your decisions—and you’ll know that your wishes will be honored.
• Make sure no one is left with a burden. Far too often, families face insurmountable expenses from a loved one’s healthcare needs or after their passing. At Everdays, we make it really simple to fund the plans you’ve made with the right insurance – so you can protect your family and your future.