For the most part, people assume that Medicare will take care of them once they entire retirement. While this government-funded program can help offset most of the major medical expenses that retirees have, it isn’t an all-inclusive plan and it won’t actually take care of everything. In fact, studies have shown that in retirement, individuals could need up to an additional $100,000 or more to cover their out-of-pocket expenses that Medicare leaves out.
The rising costs of healthcare are going to force people to plan and deal with more expenses than ever before. While you can purchase gap coverage to help pick up the ball where Medicare drops it, there is still a lot of planning that you have to do in order to ensure that you have the financial means to take care of your health in your second act of life. I’ve spent years working myself and have my insurance plans all in place. Still, last year I know I spent more than $10,000 out of my own pocket on medical expenses that weren’t covered. I can tell you firsthand that it’s scary and sometimes surprising to see just how much of your care isn’t covered by Medicare and other insurances.
You need to plan accordingly. Start a small savings account for excess medical bills. Try to find ways to save a little here and there so that you have a nice fund for a rainy day. If you need to, you can do like many older adults and work a few years longer just to make sure that you have the money that you need for retirement. This, however, is up to you. If you retire early or have little saved, medical expenses that you incur could be quite difficult to handle.
The average age for retirement in the U.S. is 67. Many people today are working well past that age, however, in order to offset their expenses or gather more savings before they leave the workforce. Learn about insurance options, Medicare, and out-of-pocket expenses so that you can have a plan in place before you retire. This will save you the shock and expense of huge out-of-pocket medical bills so that you can spend more time enjoying your post-work years.