STRESS-FREE RETIREMENT MINUS THE BURDEN OF HEALTHCARE EXPENSES
Stress-Free Retirement Minus the Burden of Healthcare Expenses
Among the conflicts faced by many retirees is the remarkably huge amount they need to allocate for their medical costs. In the US, spending for health purposes has doubled compared to the normal inflation rate and shows no signals of a slowdown that even those who think they are protected by insurances may struggle due to uncovered bills.
Wake up call
If you get the combined premium of a married couple aged 65 above and assume they will die at ages 85 and 87 respectively, it will likely fall at around $8,250 annually if they are under the Medicare and Medigap programs. This amount, however, excludes over the counter additional items such as eyeglasses which, if added, may total roughly $9,000. Multiply this amount by 25 years and you will get $225,000, disregarding the percentage of inflation.
Take into account that at 2.75%, the projected expenditures will reach $250,000. Unfortunately, although this may seem heavy enough, the expected rate for this year will climb up to 6.2%, which would lift that sum to $367,000 and obviously, this is quite a frightening bulk of cash.
There are many ways to keep these expenditures down. If you are still young, the best way to avoid mounting hospital bills is to keep yourself fit by joining exercise programs and quitting vices such as smoking and alcohol drinking. Aside from these, other approaches may include:
Health savings account
An HSA is the best pair for insurance since it enables you to make tax deductible contributions wherein the money becomes tax free so long as it is utilized for medical expenditures. These can also provide you with extra funds especially for costs not shouldered by your guarantee. Moreover, you cannot use the cash for other purchases or else it will be subject to a 20% penalty.
Flexible spending account
If you already have this, a good move would be to allocate the maximum allowable amount to pay for medical procedures you will need in the future since it is more affordable compared to waiting during your retirement age, when it is already unavailable.
Life insurance + benefits
The rising cost of health concerns is a struggle not only for the individual but for insurance companies as well. Many will be needing this coverage that it is probably going to be expensive, resulting to a majority of consumers preferring policies that give them greater access to death benefits in case they need money for long term care.
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