When preparing for retirement, time is of the essence.
Aside from looking forward to the enjoyable activities you can experience during the golden years, you must also take into consideration potential retirement expenses that you may need to address sometime in the future. Although circumstances differ for everyone, having the sense of mind to be secure in case something does happen is better than leaving everything to chance.
And securing a better future begins as early as the planning stage. This is why we are regularly updating you and our other readers with retirement solutions posts, as seen from our previous entry, The Benefits of Learning More About Medigap Policies.
Consider Longevity as a Key Factor in Your Retirement Plan
Did you know that more people are living longer today? As compared to previous generations, we are living a longer life – there are approximately 72,000 individuals over 100 years of age in the United States alone.
A long life may be a blessing, but one’s finances should also be identified during these additional years. Redefining how retirement should be must be done to maximize the many opportunities that the golden years have to offer.
And a good way to approach a new view of retirement is how one saves – and earns – money for it. As mentioned in an Insured Retirement Institute (IRI) report, Boomer Expectations for Retirement 2016, only 55% of the survey’s boomer respondents have set aside funds for the golden years.
With a potentially longer life and the lack of funds that the remaining 45% has to work upon, a secured future may just be a dream for some. According as well to the report, only a small number of respondents (24%) are confident that their savings will last throughout the years.
The mentioned statistic then means that more people definitely need to come up with more ways to make and save money even before the retirement phase of their lives. If applicable, consider other streams of revenue to help fund for your retirement expenses. If needed as well, employment during the retirement years is possible – work opportunities are available that boomers can take advantage of.
Identify Potential Health Care Costs
Another important factor to consider when preparing for retirement is future health care costs.
With the rise of health care costs (as pointed out by the National Health Expenditure Data Fact Sheet by the Centers for Medicare and Medicaid Services) at 5.6% growth for the next few years (2016 to 2025), one must take the necessary precautions that finances can be readily accessed when needed.
Insurance coverage, of course, is a highly-suggested approach to tackle possible health expenses. But do take note that even with insurance, policyholders are still at risk for other costs.
Let’s take, for example, a recent report done by the Commonwealth Fund. Around 15 million Medicare beneficiaries spent 20% of their household income on insurance premiums and out-of-pocket health care costs.
The gaps, when averaged at a per-year amount, costs up to $3,024.
Additionally, long term care insurance is another retirement expense that should be identified and addressed. As stressed by the U.S. Department of Health and Human Services, individuals turning age 65 are likely to receive some form of long term care soon.
And the costs associated with this form of care are expensive. At a monthly and national median stand, nursing home care (for private rooms) may cost up to $7,698; home health aide services fees at $3,861.
As such, knowing and including these health care costs when preparing for retirement is essential in attaining the future you dream of.
Enroll During the Medicare Supplement Open Enrollment Period
To address the mentioned health care costs, consider purchasing retirement solutions such as a Medicare (Medigap) Supplement Plan and a Long Term Care Insurance (LTCI) policy.
An LTCI efficiently provides some much-needed comfort in addressing the high costs of care. Enrolling for a plan earlier also opens up more opportunities, for there is a greater chance of being granted coverage and premiums can be safely managed this way.
For Medicare Supplements, take advantage of the Medigap Open Enrollment Period (OEP). This is a six-month period that begins on the month you turn 65. You must be enrolled in Medicare Part B as well.
Medical underwriting isn’t conducted during the OEP. This means an applicant has a higher chance of being granted Medicare Supplemental Plan coverage even if he or she has a health problem. Also, private insurance companies cannot charge applicants higher premium rates during the OEP.