Health care expenses represent one of the most serious risks to retirement income and overall financial security. Your first step in reviewing coverage should be to find out the extent of coverage provided by your retiree health care plan if you have one. Then you need to understand Medicare eligibility requirements and coverage.
Although many retirees assume that Medicare will cover all necessary medical expenses, the truth is that Medicare coverage is limited. Under Part A, you are still responsible for various costs, including deductibles and co payments as well as any charges that are greater than the Medicare-approved limits. Optional Medicare Part B coverage pays for many medical services and supplies that were not covered by the standard Part A. To ensure timely coverage, you must carefully follow the Medicare application process and milestones.
Many retirees also buy “Medigap” insurance, also known as Medicare Supplement Insurance, which pays for some medical costs that are not fully covered by Medicare Part A or Part B. The potential need for such a policy is one good reason to review and update your health coverage.
Long term care insurance.
The potential need for long-term Medical care is higher than most people realize. In fact, roughly 50% of Americans now turning age 65 will be admitted to a nursing home at some point in their lives. The cost of such care is staggering: current estimates show that just one year in a nursing home can range from $42,400 to over $200,000. Even home based care can be very expensive. And these costs are rising every year. Long-term care insurance can help prevent these expenses from depleting your retirement assets. There are significant variations among long-term care policies, so you should investigate them thoroughly before making a choice.
Upon your death, the loss or reduction of income from your pension or annuity could adversely affect the quality of life for your surviving spouse or family members. One way to ensure that your family is covered is by making sure you have the right type and amount of life insurance. At your death, the proceeds will be paid to your beneficiaries, free from income taxes and the delays of probate, providing your loved ones with immediate access to the financial resources they will need.
There are two general categories of life insurance: term and permanent. Term insurance is purchased for a specific period of time- for example, 5, 10 or 20 years. Permanent insurance covers and individual until death-regardless of age. In addition to replacing lost income, life insurance can be used to achieve many other financial goals, such as eliminating debt, preserving savings, and paying estate taxes. A thorough review of your situation and your present coverage will reveal whether you need more, less, or different kinds of life insurance now and in your retirement years.