Most people understand that planning for retirement is essential if you want to have enough money saved to enjoy your golden years. But what some people don’t realize is that part of retirement planning means saving for your future health needs as well.
Medical care in the United States is costly, and if you don’t plan properly a medical emergency could bankrupt your family. In fact, 66% of all personal bankruptcies filed in the U.S. last year were due to medical bills.
Don’t let that happen to you.
To protect yourself, your finances, and your family, here are seven things you can do right now to plan for your future health needs.
1. Maintain Health Insurance
Planning for your future health needs doesn’t just mean planning for your healthcare expenses in retirement. It means planning for healthcare expenses you could incur tomorrow.
Injuries, illnesses, and medical conditions of all types can occur to anyone at any age. Even if you’re young and healthy, the single best thing you can do to protect yourself is carry health insurance.
If you don’t already have health insurance through your employer, visit the HealthCare.gov marketplace to learn what plans are available in your state and when the next enrollment period begins.
2. Budget for Medicare: It’s Not Free
Many young people assume that when you turn 65 you get free healthcare through Medicare. That is absolutely NOT the case.
There are multiple parts to Medicare, and while some parts are premium-free and/or optional, everyone is required to enroll in Medicare part B — and it’s far from free. The standard premium for part B coverage in 2022 is $170.10 per month.
When you start collecting Social Security, this monthly premium gets deducted right off the top. For example, if you’re expecting to receive $1,500 per month from social security what you’ll really receive is $1,329.90.
3. Invest in a Health Savings Account
You can plan for your future health needs and medical costs by putting money into a pre-tax health savings account. The money in an HSA can be applied towards copayments, deductibles, and coinsurance but cannot be used to pay monthly insurance premiums.
Whether or not you’re eligible to invest in an HSA depends on your health insurance plan and how high your plan deductible is.
4. Get Disability insurance
What would you do if you became ill or disabled tomorrow and could no longer work?
Would you be able to continue to pay your bills, feed your family, or continue to build your retirement plan?
For most Americans, the answer is no.
That’s where disability insurance comes into play.
Disability insurance is actually income protection insurance that offers you a way to continue to collect a portion of your paycheck even if you are too ill or injured to work. Depending on the type of policy you choose you can collect disability insurance for as little as a few months or all the way up until retirement age. The longer your coverage period, the more protection and benefits you’ll earn.
To learn more about disability insurance, check out this guide from Physicians Thrive.
5. Get Life Insurance
Life insurance isn’t just a lump sum payout to your beneficiaries when you die. In addition to a death benefit you can choose a life insurance policy with living benefits to help pay for medical expenses and hospital bills.
Commonly referred to as a terminal illness rider, most insurance companies allow you to collect living benefits if you’re diagnosed with a terminal illness, a chronic illness, or a medical condition that requires you to pay for long-term care.
6. Get Long-Term Care Insurance
With long-term care insurance you can pay for the costs of out-of-pocket expenses associated with long-term care, regardless of your age. Benefits can only be used to cover certain medical expenses, but you can collect those benefits long past retirement age when Medicare kicks in and disability insurance benefits end.
7. Be Proactive About Your Health
The best thing you can do to plan for your future health needs is to start taking your health seriously today.
While accidents and unexpected diagnoses can occur at any time, there are some simple things you can do now to help prevent yourself from getting sick in the future:
If you smoke, quit smoking. Reduce or eliminate your intake of unhealthy fats and sugars. Develop an exercise plan to keep your heart healthy and reduce the likelihood of becoming obese and developing diabetes.
There are all sorts of small changes that you can make today that can help to improve your health tomorrow and decades from now.
In Conclusion
Proper retirement planning includes planning for your future health needs, and medical bills can burden you at any age in life. Whether you’re in your twenties, forties, or sixties, it’s never too late to start making smart financial plans regarding your health.
With the right insurance policies and a health-conscious approach to life, you won’t have to end up like the millions of Americans that struggle to pay off their medical debts each year.
