Save on medical costs during retirement

While you likely won’t have the day-to-day expenses during retirement that you had while working, you’ll still have to pay the costs of utilities, insurance, and groceries. On top of that, you will likely have more medical costs. But there are ways to manage your health care costs in retirement. Here’s how:

Save more now
You’ll likely have health care expenses during retirement that can drain money earmarked for other retirement spending and goals. Be proactive to protect your retirement lifestyle by saving more money now for health care expenses.

If you have a Health Savings Account (HSA) while still working, fully fund it each year. You can use these pre-tax dollars for qualified medical expenses when you retire. If you have permanent life insurance, there is typically a cash value account you can access tax-free for medical costs. If these tools aren’t available, contribute to a savings account earmarked for future health care costs.

Stay healthy
Taking care of your health by being physically active and eating well is an easy way to reduce your healthcare costs now and in the future. Explore fitness programs and healthy eating classes available in your community when you retire. Check for program discounts through your health insurance carrier.

Practice prevention
See your doctor regularly and when you experience symptoms of illness. Take advantage of free health risk screenings available in your community. By checking things out early, you may be able to save on bigger and more expensive problems that could become chronic or worse.

Understand your coverage
It’s easy to underestimate your share of health care costs during retirement. According to Medicare reports, if you retire today, you can expect to pay an average of $4,123 a year out-of-pocket for health care costs. This includes the cost for Medicare Part B (for services and supplies), which requires a monthly premium payment.

Supplement your coverage
Medicare won’t cover all healthcare costs during retirement. If you won’t have retiree health insurance from your former employer available, consider a Medicare Supplement Plan (Medigap) to pay for services not fully covered by Medicare. For prescription drug coverage sign up for Medicare Part D. These coverages add to your retirement expenses, but they protect against larger out-of-pocket costs, which can overwhelm you.

These small changes can help protect your financial freedom in retirement.

Article provided by Local Government Federal Credit Union.