Retirement planning conversations are dominated by talk of investment strategies and portfolio longevity, but one of the most crucial elements is often forgotten: healthcare expenses. Having a cohesive plan to cover healthcare needs can go a long way in helping to cover your necessary costs, especially because healthcare is one of the highest spending categories for retirees.
What Does Medicare Do for You?
You may be spending too much on basic healthcare needs if you don’t factor in your healthcare expenses and seek cost-saving alternatives. Medicare is a vital service that can provide the assistance you need to afford to maintain your health.
Since Medicare reduces healthcare costs significantly for seniors, it should be the focal point of healthcare coverage discussions for those 65 and older. Although we may want to live as healthily as possible by eating well and exercising, the natural process of aging requires us to take more care of our health and ultimately spend more on healthcare.
When you’re aware of the need to plan for healthcare costs, the next step is making sure you know how to utilize Medicare. Medicare open enrollment for 2022 is from October 15 through December 7. So, make sure you have a plan to factor Medicare into your retirement plan.1
It’s crucial to understand how Medicare works and how you can get the most comprehensive coverage at the lowest possible cost when you retire. Many people who are retiring are unsure whether they require all the elements of Medicare or just one or two parts.
What You Need to Know About Medicare
Open enrollment usually lasts roughly seven months and starts 3 months before the month of your sixty-fifth birthday.2
- Private insurance firms provide Medigap insurance to help pay for Medicare’s unfunded expenses, but those with Medicare Advantage Plans are not permitted to do so.3
- Medicare rates can change depending on which components you sign up for. There are four sections available to sign up for: Part A, Part B, Part C, and Part D – all of which provide different kinds of healthcare coverage. 4.
- In general, Part A provides hospital and long-term care coverage.
- Part B provides coverage for necessary care, such as doctor visits and preventative care services, as well as physician services and some drug prescription coverage.
- Part C is Medicare Advantage coverage sold by private insurance companies for what is not covered by part A or part B Medicare.
- And Part D is for prescription drug coverage.
It’s important to understand that you do not have to take any action to enroll in Medicare. You will automatically be enrolled if you have a Social Security number and reach the eligibility dates.5 Although it is crucial to determine how you will utilize Medicare in your overall retirement plan, figuring out how it fits into your overall retirement picture is not simple.
Sign up for a complimentary review of your financial plan with us, and we can build a comprehensive retirement plan that will factor in your healthcare costs and your Medicare situation.
Hilltop Wealth Solutions (“Hilltop”) is a registered investment advisor with the Securities and Exchange Commission (“SEC”) and only transacts business in states where it is properly registered or is excluded or exempted from registration requirements. SEC registration does not imply a certain level of skill or training. Please refer to our Form ADV Part 2A disclosure for additional information regarding the qualifications and business practices of Hilltop. Hilltop Wealth Solutions, LLC is an SEC Registered Investment Adviser firm. Hilltop Tax Solutions, LLC, is an affiliate of Hilltop. Wealth Solutions that provides tax and bookkeeping services.