Healthcare Costs After Retirement
Did You Know..
Even with the use of trusted financial advisors, counselors and planners, retirement plans still somehow tend to lack one very important key component – healthcare costs in retirement. Many Americans are under the impression that all healthcare costs in retirement will be covered by Medicare. This is the case if one plans accordingly and uses the Medicare system properly, but the key is that Congress has also changed the rules when it comes to Medicare and many are unaware of it. According to a recent study interviewing individuals who had developed financial retirement plans only 8 percent of them actually accounted for any type of medical expenses whatsoever.
Legislative Changes Effect On Health Care Costs After Retirement
Recent legislative changes have had a significant impact on health care costs after retirement. Provisions created by Congress have led to decreased Social Security benefits, increased health care costs and increased taxes. So what does that mean for you as an aspiring retiree, you might be wondering? It means that as you enter retirement you have higher medical insurance premiums to look forward to, with less coverage options, along with decreased Social Security benefits. To put it a different way, you will be required to pay more money for less coverage with less support. Sounds great, right?
Hardly. However, with proper financial planning the burden that legislation has placed on you – the retiree – can be lifted.
Health Care Costs After Retirement Are Inescapable
Changes in the Programs Operations Manual system of Social Security implemented in 1993 made health care costs after retirement mandatory. The provision states that all eligible seniors must enroll in Medicare when applicable or forfeit any future, present and past earned Social Security benefits. Fortunately, further changes were made in 2003 when the program again underwent changes that allowed for eligible seniors to enroll late in Medicare. However, when enrolling late the individual will be hit with a Late Enrollment Penalty that will stay with the senior for the rest of their life.
As a result, retirees face unavoidable mandatory cost in retirement: their healthcare.
Can I Expect That Medicare Healthcare Costs After Retirement Will Be Expensive?
Generally speaking, Medicare should provide a more affordable health care solution for seniors in retirement. However, it is important to take note that the costs reflect what is willing to be paid for in terms of coverage as well as how much income one will have throughout retirement. Medicare provides options to meet all standards of wealth
There are a few things that you should take into consideration
When reviewing your anticipated costs for health care coverage in retirement.
• According to the Medical Board of Trustees the rate at which Medicare is inflating is three times that of what Social Security is projected to see over the next decade.
Through 2028 Medicare Part B is estimated to inflate at a rate of over 5.5%, while Part D will see an inflation rate of roughly 5.7%.
• As previously mentioned Medicare will not cover all health care costs in retirement. Any dental, vision or hearing services are not covered at all unless a supplemental plan is purchased.
• Both Medicare Part B and Part D plans have an Income Related Monthly Adjusted Amount (IRMAA) that will determine premiums for those retirees deemed to have “too much” income.
Have You Considered What Your Health Care Costs After Retirement Will Be?
Even when you factor Medicare into your financial retirement equation the effect of health care costs in retirement can be rather impactful. It is important when figuring what you can expect to pay out throughout the duration of your retirement to consider unforeseen medical emergencies, services that are not covered by Medicare, as well as your overall age and health history.
Whether you consult a professional or decide to take matters of your financial planning into your own hands, take the time to consider all possible options that may affect what you can expect to pay in health care costs after retirement.
Will My Health Care Costs In Retirement Be Expensive?
Again, that is entirely up to the type and quality of coverage you are looking for in retirement. The other factor is that cheaper is not always cheaper due to the possibility of actually needing care. Heep in mind that a stay in a hospital room almost anywhere in the country may cost thousands and if you are covered for that stay you will have to pick up the tab
To be fully insured through Original Medicare the costs in premiums alone are roughly $4,400.00 for the year. Now, please keep in mind that with this insurance, if you have a medically necessary need and your are admitted as an “inpatient” into a Medicare recognized hospital the only cost you will see is the one time payment of the Part B Deductible $198.00 in 2020. All other costs will be.
Determining Your Health Care Costs In Retirement
Determining these costs and calculating the future cost is what Jester Financial Technologies does. All that is needed to know is your gender, residency, age, retirement age, types of coverage you are planning for and of course your income. Remember, the biggest factor in determining the cost of your healthcare in retirement will be your income. Check out our FREE online calculator for a reliable estimate of what your health care costs after retirement might be. At Healthcare Retirement Planner we make determining your health care costs in retirement easier.Contact us today.
What is HealthcareRetirementPlanner.com
Healthcare Retirement Planner (HRP) is a comprehensive solution that helps identify potential problem areas in a retirement plan and design options to minimize the problem.
On an ongoing basis, HRP conducts research and aggregates all data to be used in its analysis algorithm. Pulling from areas such as The Congressional Budget Office, Centers for Medicare and Medicaid, polling individual insurance carriers across the United States along with private research firms, and positions HRP as having the most accurate information and calculations available.
Within the calculation process there are many variables that need to be considered, as the solutions are customized to each individual’s retirement plan. Variables that are required to analyze financial situations include, but are not limited to: age, gender, location, overall retirement income, types of retirement income, inflation and COLA. HRP has simplified this process.
The process of using HRP is straight forward. Simply by answering a few simple demographic questions, entering retirement asset information and income, along with assorted growth rates, you are supplied with a detailed year by year analysis that projects out 20+ years as to how the investors’ current financial plan will be impacted by their Medicare costs and the impact on their Social Security benefit.
Who is HealthcareRetirementPlanner.com?
We are comprised of Financial Professionals, Medicare Specialists, Technology Experts and the foremost authorities on how this one cost will affect your bottom line especially when your health is on the line.
There are many financial institutions that do tremendous work when it comes to asset building, planning for college or creating stock/bond/mutual fund portfolios, but addressing concerns of affording health care costs…well for that, there is us.
Healthcare Retirement Planner was created with one purpose in mind: to provide data, education and tools necessary to help the financial industry create better financial futures and to plan for one of the biggest expenses in not only retirement, but life – their health.
In a time where health costs dominate the media, the political landscape and your bottom line, retirement planning with all of the facts have never been more important.
Origin of Our Data for Healthcare Cost in Retirement
On an ongoing basis, HRP conducts research and aggregates all Healthcare data to be used in its analysis algorithm. Pulling from areas such as The Congressional Budget Office, Centers for Medicare and Medicaid, polling individual insurance carriers across the United States along with private research firms, and positions HRP as having the most accurate Retirement information and calculations available.