What does it take to be financially prepared for potential healthcare costs in retirement? As the old saying goes, "Needing insurance is like needing a parachute. If it isn't there the first time, chances are you won't need it again." Healthcare costs can add up for even the healthiest of retirees, so what can we do to prepare for these costs, and how would you handle them in the event that you need long-term care?
Before determining the exact amount we need for our healthcare nest egg based on our specific circumstances, remember long-term care costs are not covered by health insurance. Assisted living and nursing home care must be paid out-of-pocket, by long-term care insurance, or in California by Medi-Cal (generally speaking, assets must be depleted before one is eligible for Medicaid/Medi-Cal).
Covering deductibles, premiums, out-of-pocket and long-term care expenses could cost approximately $350,000 in today's dollars to achieve a 90% chance of covering those expenses. Long-term care in a nursing home alone will cost $6,844 per month, based on the national median cost.
Some of the first questions you should be asking yourself are, "How healthy am I, and what is my family medical history?" The answers will help you make more informed retirement and healthcare decisions. For example, if you require expensive drugs, your savings could be depleted quickly. Taking a hard look at one's life expectancy could prompt the decision to retire earlier. There are numerous other questions that could impact healthcare decisions in retirement.
Consider consulting a Financial Planner to examine several hypothetical cash flow situations. This can help guide you toward answering the question of how much you should set aside and how to invest funds allocated toward healthcare to meet your needs.
Focus on what you do know, rather than speculating on everything that could be.
Our financial planners at Insight Wealth Strategies will meet with you to discuss your specific situation to determine the best course of action. Just like properly packing a parachute before jumping out a plane, retiring with a plan for healthcare will put your mind at ease.
David Chazin is a registered representative of Lincoln Financial Advisors.
Securities and advisory services offered through Lincoln Financial Advisors Corp., a broker/dealer (member SIPC) and registered investment advisor. Insurance offered through Lincoln Marketing and Insurance Agency, LLC and Lincoln Associates Insurance Agency, Inc. and other fine companies. Insight Wealth Strategies is not an affiliate of Lincoln Financial Advisors Corp. Lincoln Financial Advisors does not provide legal or tax advice. 3000 Executive Parkway, Ste 400. San Ramon, CA 94583. (925) 659-0217. CA Insurance License # 0D45501 CRN1785874-050117
Let the free Retirement Planner by MoneyTips help you calculate when you can retire without jeopardizing your lifestyle.
Originally Posted at: https://www.moneytips.com/safeguarding-your-health-and-finances
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