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Retirement Planning 101: Here’s What You Need To Know About Health Care Costs Before You Retire

Retirement Planning 101
Retirement Planning 101: Here's What You Need To Know About Health Care Costs Before You Retire. (Photo: DGLegacy)

If you have been enjoying your younger years working or traveling, it’s now time to consider retirement planning 101 for the next chapter of your life. As you near your golden years, it’s important to ponder once and for all about this crucial aspect of your retirement planning 101- health care costs. To help you navigate your retirement planning 101 in terms of health care costs, here’s a comprehensive guide to help you start.

Retirement Planning 101

Retirement Planning 101: Here’s What You Need To Know About Health Care Costs Before You Retire. (Photo: Montana.Edu)

Retirement Planning 101: Health Care Costs

The first thing you need to review in your retirement planning 101 is the health care costs. To give you a glimpse, according to a study in 2021 reported by Entrepreneur, a 65-year-old couple retiring reportedly spend around $315000 on healthcare expenses throughout their retirement years. Note that this estimate includes premiums, deductibles, co-payments, out-of-pocket costs associated with Medicare Parts A and B, and prescription drug coverage (Part D). However, this is just an overview of retirement planning 101 healthcare costs which means that the costs will still be dependent on individual health conditions, retirement location, and changes in healthcare policies.

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Retirement Planning 101: Early Retirees’ Health Care Coverage Options

Retirement planning 101 requires health care coverage and there are three main health coverage an early retiree may avail in the USA which include:

1. COBRA: Consolidated Omnibus Budget Reconciliation Act

COBRA coverage makes people to enjoy their employer-sponsored health insurance coverage for a limited period after resigning from their job. However, COBRA coverage can be quite costly because the retiree will shoulder the employee and employer portions of the premium as well as the administrative fee.

2. Spouse’s Employer Coverage

SEC coverage allows the early retiree’s spouse to join their spouse’s plan as long as the retiree’s spouse is working and has access to employer-sponsored health insurance.

3. Medicaid

Medicaid coverage, for those aged 65 and up, is for early retirees who have limited income and resources. Note however that the qualifications may be different from one state to another, so it’s best to review the given guidelines to know if you are eligible.

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Retirement Planning 101: Tips

To start with your retirement planning 101, you have to look at your present, ongoing, or possible health conditions. Consider factors such as your age, medical history, and lifestyle choices. By evaluating these factors, you will be able to have a grasp of potential costs in terms of routine check-ups, prescription medications, and potential medical treatments or procedures.

READ ALSO: Hidden Costs of Education: Alternative Ways to Finance College Education!

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