Help yourself get the most of out of retirement by thinking about future health care needs now.
Retirement is a big milestone in everyone's life, and with the ever-changing economy the idea of retiring means different things to different people. It is more important than ever to consider your personal definition of what retirement means to you and plan for the future with those goals in mind. With everything you want to accomplish in retirement, making sure you've thought through all the issues before you get there is an important part of planning.
Everyone talks about making sure your finances are in order, but have you given any thought to your health care needs? Considering that medical and long-term care get more expensive every year, and as we age we're more likely to need some form of it, including health insurance in your retirement plan certainly makes sense.
This Action Plan is intended to help you handle a challenging planning process - and hopefully avoid a few missteps along the way. Please be aware that this is an overview, not a comprehensive blueprint covering every situation.
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Consider your health care options:
Take steps to protect your health:
There's a lot to think about with retirement. By getting an early start and following sensible steps, you should have a fair amount of confidence and security when the big day finally rolls around. Here are the details that should help you carry out the steps above.
With so many health care options, how do you decide what's right for you? Start with the easiest options - weigh the coverage you could receive from employer-sponsored plans from your employer, or your spouse's, if available, against any Medicare coverage for which you are eligible. Whatever plans you look at be sure to consider coverage, benefits, convenience, and total costs. In addition to premiums, find out about co-pays, deductibles, prescription costs, and costs associated with using out-of-network providers.
Employer-sponsored retiree health plan. Find out if your employer offers coverage for retirees. If so, this may be a simple, affordable option. Contact your HR or benefits department.
Spouse's employee health plan. If your spouse will be employed after you retire - and he or she is covered by an employee health plan - you may be eligible to join that plan quickly and at a reasonable cost. Contact your spouse's Human Resources or benefits department.
COBRA This federal program allows you and your covered dependents to stay on your company's plan for up to 18 months after retiring - giving you extra time to find replacement coverage or reach Medicare eligibility. Your coverage will not change, but your premiums will increase since your employer will no longer be contributing. Contact your Human Resources or benefits department.
Medicare The government's Medicare program offers affordable, comprehensive coverage. Check your eligibility at the Medicare.gov website. To find Medicare plans that carry the AARP name, visit the Product Finder Tool on this site.
Private health insurance You may want to consider a new plan from a private health insurer. Private plans may be more expensive than other alternatives, may require medical examinations prior to acceptance and may have restrictions or coverage limitations regarding pre-existing conditions. However, these plans may offer greater flexibility and coverage than other options you are considering. Find ratings of plans nationwide at nacq.org. For plans made available by AARP, visit the Product Finder Tool on this site.
Long-term care insurance. Long-term care insurance is not health insurance. Rather, it's designed to pay for services not covered my most plans, such as nursing homes, assisted-living facilities and home health aides. This coverage tends to get more expensive the closer you approach retirement age. Consider getting a policy well before retirement to lock in lower rates and make it more affordable. Request a free consumer guide from the National Association of Insurance Commissioners at their website. For plans made available by AARP, visit the Product Finder Tool on this site.
Creating a sound retirement plan isn't as hard as many people think. Of course, it helps to have access to financial information and Financial Advisors using plain language.