Looking after our health can start to get pretty costly as we get older, as unfortunately, our body does not remain super healthy and fit for our entire life… This is why people are advised to budget wisely when putting together their retirement plan, with health expenses being a huge consideration.
Almost an average amount of retirees across the country spend hundreds of thousands of pounds on health care during their retirement life. Although you are suffering from no health issues right now in life, you never know what issues may arise at a later point and how serious they can get.
Hence, it is always good to be prepared for such a scenario well in advance. To help you with this, here are four simple ways to finance your healthcare during retirement so that you are not left helpless when the time comes.
1: Choose the Right Medicare Plan
By the time you turn 50, there are certain important decisions that you are bound to take regarding Medicare. You need to choose a Medicare plan that is the most suitable for you and your potential scenarios in future taking your health.
Although health is unpredictable, it is always good to have an advantageous plan to cover your expenses rather than being completely unprepared for it.
By having a Medicare plan can keep your budgeting simpler since insurance premiums are much easily predicted. We recommend you look for a plan that has deductible which are affordable in any given financial year, a reasonable out-of-pocket limit and a program you are happy with (if applicable).
2: Get a Long-Term Care Insurance
Although you have a Medicare plan covering your health expenses, having long term care insurance in a way is beneficial. A separate long term care insurance policy is a good idea for people entering or planning their retirement.
However, if you are planning to take a long term care insurance policy, it is important that you at least do it way before you retire. The premiums you might get on these policies in your 50s are comparatively much lower than the premiums on these policies taken at the age of 60 and above.
When checking policies, look for the benefits they include, as most policies have variable benefits involved in their terms and conditions. Additionally, also check whether you are being sold PPI alongside. If you discover that PPI was mis-sold to you while taking the policy, you can move on to make a claim. You can make a PPI claim by yourself or can seek help from claim management companies.
3: Check Out Assisted Living
If your health degrades as you descend into your retirement years, you might have issues performing your daily activities. Having an assisted living facility can enable you to have a nice compromise both in care options and in price.
There are several communities funded by government which has campuses including standard apartments and assisted living apartments. You as a retiree can start off with a standard apartment and then gradually shift to a higher level of care of needed later in life.
To be honest, this saves you a lot of money, especially since you are not paying for additional help until you actually require it.
Note that these communities will not accept a retiree if they are already in poor health, so it is important that you buy your place early.
4: Self Insure with an Annuity
The major benefit of fixed annuities is that they pay you a set amount each month for as long as you are alive. This source of extra income can prove to be a lifesaver if at all you are into medical crisis unexpectedly.
People usually buy annuity specifically for medical expenses which in other terms is a kind of self insurance policy. However, it is your lookout to save that money only for medical related expense only.
This way, you are not only covering your health care expenses but are also building up a nice cushion while you are still in good health terms.
How to plan for the unexpected
Like we said before, certain medical condition may arise later in life while few others would simply explode in your face with little to no warning at all. Also, the longer you live the more likely you are to run into medical emergencies.
Thus, it is always better to save a fair amount for these unexpected expenses, which in turn will help you avoid being broke if you ever happen to suffer with such a crisis.