It’s time to wrap up our series on “How Much is Enough?” with a biggie: insurance.
So far, we’ve discussed budgeting for your hobbies and questions you should ask yourself before you downsize. However, one of the biggest worries we all have – retired or not – is if a large medical expense could derail our financial plan.
According to KFF, “Nearly 3 in 4 adults say they are worried about being able to afford unexpected medical bills (74%) and the cost of health care services (73%), more than say the same about other everyday expenses, such as gas, utilities, food, and housing costs, and about paying for prescription drugs (55%).”
While we can’t plan for everything, we can help ensure you’re as prepared as possible.
Much of ensuring you’re taken care of as you age has to do with your insurance coverage. It’s important to know what’s included with your current benefits and what you might need to supplement.
Evaluate Your Current Coverage
Start by evaluating your current health insurance coverage. Understand what is included, what is excluded, and what out-of-pocket expenses you might incur. Keep looking at your coverage every year; don’t take for granted that your policy won’t change. Put Open Enrollment (starts November 1st) on your calendar and evaluate your policies every year.
Understand Medicare Options
As you approach 65, familiarize yourself with Medicare. Understand the differences between Medicare Part A, Part B, Part C, and Part D. Consider supplemental plans (Medigap) to cover expenses not included in standard Medicare.
Consider Long-Term Care Insurance
Long-term care insurance can cover costs associated with assisted living, nursing homes, or in-home care. Evaluate whether this type of insurance is necessary based on your health, family history, and financial situation.
Review Prescription Drug Coverage
Prescription drug costs can add up quickly. Ensure you have adequate coverage for medications you currently take and consider future needs as well.
Plan for Dental and Vision Care
Medicare doesn’t cover most dental and vision care. Explore additional insurance plans or set aside funds specifically for these expenses.
Financial freedom often comes down to being prepared. Whether it’s budgeting for the necessities or making sure you have the right coverage, those are the types of things that allow you to do what you want to do because you’re not stressing about the unexpected – you’ve planned for it.
Working with a financial planner means that you have someone on your team who is asking the important questions. You might feel that you have a handle on your finances, but it’s our job to look for any holes or inconsistencies that you might not see.
It’s never too early to get these plans in place. Remember that your financial plan should evolve with the changes in your life and we’re here to help make sure that happens.
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