Proper budgeting is essential before and during retirement. You understandably have already taken inflation and cost-of-living adjustments into account when preparing your finances for the future. However, many people fail to take into account an increasing need for healthcare services, medications and more as they get older. The last thing that you want is to run out of money in retirement or to feel financial strain because of a lack of planning for this important expense. These important tips can help you to more accurately prepare for future healthcare expenses.
Create a Realistic Budget for Healthcare Expenses
It is challenging to prepare financially for an increasing need for healthcare services and prescription medications without a crystal ball, but looking at common or average figures may be a smart starting point. Estimates for Medicare premiums for a typical retired couple range between $240,000 to $265,000 from the age of 65 through to the end of their lives. Understand that this estimate does not take into account prescription medications, out-of-pocket expenses or long-term care expenses. More than that, healthcare costs have been increasing at a substantially faster rate than general inflation. You can use online calculators to get a more accurate idea about how much money you should allocate for healthcare in your monthly budget. Be aware that if you have underlying health concerns going into retirement, you may want to estimate for higher expenses than average.
Use Preventive Care Services
Up until you retire, you should schedule recommended preventive care services use the benefits from your health insurance plan. If and when you qualify for Medicare, learn more about the free preventive care services available through this plan, and utilize them fully. These free services include annual diabetes screenings, mammograms and even some types of cancer screenings. When you stay on top of your health and identify potential issues sooner, you may be able to make lifestyle adjustments or other measures to prevent a more serious outcome that generates more expensive medical costs. For example, if a free diabetic screening reveals that you are prediabetic, you may be able to adjust your diet so that you do not develop diabetes and require regular insulin injections.
Improve Your Lifestyle
Preventive care services are essential for early diagnosis and treatment, but there are important steps that you can take to reduce your risk of developing many serious diseases. Maintaining a healthy weight, following a balanced nutrition plan and getting exercise on a daily basis can provide you with incredible benefits. Through these steps, you may avoid many conditions related to obesity, heart disease and more. The best time to improve your lifestyle is right now. Ensure that you make adjustments that become part of your lifestyle rather than that are temporary changes.
Look for Savings on Prescription Drugs
Medications for conditions like high blood pressure, diabetes, depression and more are common, and they can cost a fortune over the course of a year. Regardless of whether you take medication daily or you are prescribed medication as needed for illnesses, always look for ways to save. For example, you can opt for Medicare Part D coverage, which pays for some prescription drugs. This is an optional coverage that you must specifically sign up for. There are also independent prescription drug plans available.
Invest in Long-Term Care insurance
The unfortunate reality is that many adults will need long-term care at some point. This is specialized care that is commonly associated with needs at the end of life. However, you may need long-term care for a limited period of time after a serious injury, a major medical procedure or something else. This type of care can be expensive, and the majority of the expense is usually paid out of the patient’s pocket. Long-term care insurance is available to pay for most or all of these expenses. It is usually more affordable to buy this coverage earlier in life, so now may be a great time to compare plans.
Healthcare services and medications are essential in retirement, and their cost often escalates rapidly. Ensure that you have a thoughtful and effective strategy for paying for these expenses by incorporating some of these tips into your retirement planning and budgeting efforts.