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Health care in retirement is a big expense, and it could cost you a large chunk of your retirement money. Smart planning for health care ahead of time will help you better prepare to handle these retirement expenses. Planning a budget for health care costs and enrolling in a health savings account are two ways you can be ready to handle health care costs in retirement.

Planning to save for health care costs should be a big part of your retirement plan. Sadly, health care costs add up for retirees thanks to inflation and will only continue to increase. To get an idea of the health care costs you should plan for, a couple retiring in 2019 at the age of 65 can expect at least $387,000 in health care expenses.

So, as you begin planning for health care costs in retirement, be sure to include all your expenses. These might be premiums, supplemental insurance, long-term care and out-of-pocket costs such as co-pays and deductibles.

If you want to set aside money in a separate account solely for medical expenses, a Health Savings Account (HSA) is worth considering. Enroll in a high-deductible health plan to start a health savings account.

A Health Savings Account helps you save money to cover your medical expenses. The money you withdraw from an HSA is tax-free when you use it to pay for qualified medical expenses. Also, you can use the funds to pay for what Medicare does not cover or for long-term insurance (which can be costly).

If you’ve maxed out your HSA contributions or are not eligible, you can use other options to manage your costs. For example, you can separate funds for medical expenses, delay receiving Social Security benefits, maintain your health to reduce your medical costs.

Are you ready for the health care costs in retirement? Start planning for health care expenses today and include them in your budget and retirement plan. If you want to learn more about creating the income you deserve in retirement and learn how to cover medical expenses like those described, join us at one of our upcoming Retirement 101 classes.

The post The Best Way to Prepare for Health Care Costs in Retirement appeared first on Bone Asset Management | Financial Advisor Bloomfield Hills, MI.