Planning for retirement: additional healthcare decisions

Last Updated: November 26, 2012

In the blog post Medicare: A Component of Retirement Planning we highlighted Medicare eligibility, the components of Medicare coverage, and touched briefly on Medigap. This post provides additional considerations to Medigap while also delving into long-term care. Long-term Care In addition to regular healthcare, everyone runs the risk of needing some type of long-term care at some point in their lives. And it’s an expensive proposition; in 2010, a semi-private nursing home room cost $70,000 annually on average (Survey).
As you get older, your chance of needing long-term care increases—so does the cost of insuring against that risk. The earlier you purchase long-term care insurance, the lower the premiums. Plus, you may need long-term care before you retire. Aside from rising premiums as you age, you might actually become ineligible for coverage (if you become terminally ill for example). Medigap You might also want to consider what’s known as a Medigap policy, which covers amounts that Medicare does not. A Medigap policy is health insurance sold by private insurance companies to fill the “gaps” in Original Medicare Plan coverage. Medigap policies help pay some of the health care costs that the Original Medicare Plan doesn’t cover. If you are in the Original Medicare Plan and have a Medigap policy, then Medicare and your Medigap policy will each pay their shares of covered health care costs. Medigap policies are offered by private insurers not affiliated with Medicare, and the costs vary by level of coverage. Insurance companies can only sell you a “standardized” Medigap policy that has specific benefits so you can compare them easily. Seek Guidance Planning for medical expenses is a critical component of retirement as these expenses can quickly erode retirement savings. A retirement consultant can guide you on a variety of strategies to help you navigate your options based on your personal circumstances.   Survey, MetLife. 2010. PCI’s archived blog entries are dated, the rules and statutes referenced may have changed. The analysis or guidance within these blog entries may have become stale, dated, or no longer accurate. PCI will not update or change these entries to reflect the latest analysis or development.


Cody Mendenhall, CFP®, Executive Director



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