People need to be aware of the potential costs of medical care in retirement and plan ahead so they can meet those obligations if and when the need arises.
When individuals retire, they not only walk away from work, but also relinquish thier steady paychecks.
For many, retirement can be a potentially risky financial endeavor. Saving for retirement is a great way to mitigate such risk, but unforeseen expenses, such as medical bills, can quickly derail a retirement plan.
Many people have a greater need for medical care as they get older. The Fidelity Investments Retiree Health Care Cost Estimate indicates health care can be one of the biggest expenses a person will take on in retirement.
The average 65-year-old couple who retired in 2021 in the United States can expect to spend $300,000 on health care and medical expenses during retirement.
The financial resource The Street says other studies suggest it’s wise for retirees to plan to spend between $3,000 and $7,700 per year on health care.
Financial advisers warn that relying exclusively on Medicare to cover health care costs isn’t going to cut it. Benefits under the Medicare program often aren’t enough to pay for all of a retiree’s needs. There may be gaps for chronic treatment of illnesses and specialty treatment for certain conditions. Longterm care services also typically are not covered. It’s important to note that Medicare will cover general doctor’s visits, but it does not cover the cost of deductibles or copays.
Individuals need to be proactive and plan for medical expenses in retirement. After housing, health care is the most significant expense for retirees. Health spending accounts and long-term health insurance are two options for people looking for ways to cover their health care costs in retirement.
As of 2022, people can contribute up to $3,650 for an individual or $7,300 for a family
per year into a health savings account. After age 55, an additional $1,000 per year is allowed. Money in an HSA grows tax-free and it can be spent tax-free on qualified medical expenses. Once a person has Medicare, he or she no longer is eligible to contribute to the HSA, but can use money already in the account to pay for qualified medical expenses that are not covered by Medicare.
Long-term care insurance
is another option, and many people invest in such an account during their 50s or 60s. The earlier an individual enrolls in a program, the lower the premium. According to Personal Capital, most policies will not start until a patient has needed assistance for 90 days and other qualifying guidelines are met. Generally speaking, long-term care insurance also is use-or-lose. If there’s never a need to use the insurance, it will not be refunded. This is a risk that certain people are willing to take.
Exercise keeps the body and brain healthy. That’s why exercise should be an important component of daily life no matter one’s age.
There are many reasons to get in shape. Weight loss is a prime motivator, as is reversing a negative health effect, such as high cholesterol or increased diabetes risk. Routine exercise also can improve life expectancy. WebMD says exercise keeps the body and brain healthy. That’s why exercise should be an important component of daily life no matter one’s age. Research published in the journal Immune Aging found that how people age is 75 percent lifestyle and only 25 percent genetics, which underscores the importance of the lifestyle choices people make.
Many health experts say that cardiorespiratory fitness may be just as valuable a metric to determine overall health as blood pressure and lipid levels. People with a high aerobic capacity can deliver oxygen to tissues and cells efficiently to fuel exercise, according to data published in 2014 in the journal Aging & Disease. In a study involving 11,335 women, researchers compared V02 max, also known as aerobic capacity, in women with mortality data. Women who were fit
from a cardiovascular perspective had a lower death rate from all causes, irrespective of the women’s weight.
Exercise has direct stress-busting benefits that can promote longevity. The Mayo Clinic says physical activity can increase the production of endorphins, which are the body’s feel-good neurotransmitters. In addition, exercise can imitate the effects of stress, helping the
body adjust its flight or fight response accordingly, and help them cope with mildly stressful situations. While engaged in exercise, people may forget about their problems as they are focused on the activity at hand.
Strength training and physical activity can stave off the effects of frailty and osteoporosis, which affects bone strength. A study published in the Journal of Internal Medicine in 2017
found that hip fractures are associated with diminished quality of life and survival among the elderly. One in three adults aged 50 and over dies within 12 months of suffering a hip fracture, and older adults have a five- to eight-times greater risk of dying within three months following a hip fracture. Building muscle strength, balance and bone density through exercise can reduce falls and frailty, helping to prevent fracture-related health risks.
A certain degree of hearing loss can be a normal part of the aging process. However, people who take steps to protect their hearing long before Father Time takes his toll can prevent the extreme hearing loss suffered by millions of seniors across the globe. John’s Hopkins Medicine states that approximately 15 percent of adults aged 18 years and older report some difficulty hearing and up to 39 percent of adults in their sixties have hearing problems. Lost hearing cannot be restored, though hearing aids and other devices can help people with hearing loss hear better.
Speak with an audiologist, who can test your hearing and establish a baseline level against which future
tests will be measured. This way it is easier to see if hearing loss is increasing over time.
Audio devices can contribute to hearing loss. Earbuds are particularly dangerous because they fit directly next to the eardrum. The World Health Organization says that 1.1 billion teens and young adults worldwide are at risk for noise-induced hearing loss from unsafe use of audio devices. Set the maximum volume on audio devices below 60 percent and wear headphones for no more than an hour a day. Keeping music low on other devices is also adviseable.
Protective gear includes ear plugs and protective earphones. This gear should be worn whenever you expect to encounter loud noises, such as when you mow the lawn, go hunting or shooting, attend rock concerts, or visit construction sites.
• Limit use of cotton swabs. Ear wax is beneficial to the ears and can stop dust and other particles from entering the ear. Furthermore, using a cotton swab can potentially cause damage to sensitive organs in the ear if they are inserted too far or too roughly.
Steer clear of fireworks, noisy city centers, loud performances, and other situations if you do not have hearing protection.
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Driving is one way for seniors to stay independent and live fuller lives, but traffic crashes are a leading cause of injury and death for older adults, according to the Centers for Disease Control and Prevention. Older adults are more than twice as likely than younger drivers to report having medical conditions that make it difficult to drive, and usage of certain medications can further affect the ability to drive safely.
Driving is more than just understanding road signs and how the car works. Safe driving requires sufficient physical fitness to operate a vehicle. Exercising and being active by walking daily, stretching and performing strength-training exercises can make it easier to steer and get in and out of the car.
• Seat belts: Seat belts save countless lives. Some older drivers may have grown up during a time when seat belts were not standard on vehicles and may not recognize the importance of wearing them.
The CDC recommends that adults have their vision checked by an eye doctor at least once per year. Corrective lenses or glasses also should be worn if they are needed to improve vision.
Individuals should exercise caution when taking medications, especially sleep and pain medications. Even cold remedies can affect driver safety, advises the Mayo Clinic. Always read medication labels and pharmacy inserts to determine if it’s safe drive while on a given medication.
Getting older may come with certain physical limitations that can be remedied with a few modifications. An occupational therapist may be able to recommend assistive devices, such as steering wheel covers that make gripping the wheel easier, or a swiveling seat pad to make getting out of a vehicle less strenuous.
Hardworking adults spend years striving to achieve their professional goals. Along the way, planning for retirement is a way to ensure all that hard work pays off when the time comes to call it a career.
In the United States, men and women nearing retirement age may be thinking about when they should begin collecting their Social Security retirement benefits. Social Security is a social insurance program instituted by President Franklin Delano Roosevelt in 1935. The program consists of retirement, disability and survivor benefits, and workers in the United States contribute to Social Security each week.
The decision about when to claim Social Security retirement benefits is one all those who have contributed to the program must eventually make. In recognition of the difficulty of that decision, the Consumer Financial Protection Bureau (CFPB) offers the following tips to people wondering when they should begin collecting their Social Security benefits.
Full retirement age refers to the age at which people can begin collecting their full benefits. Depending on the year you were born, you can begin collecting your full benefit at age 66 or 67. Claiming your benefit before you reach full retirement age will lead to a permanent decrease in your monthly benefits. Conversely, claiming after you reach full retirement age will lead to a permanent increase in your monthly benefits.
The CFPB notes that you can expect to get an additional 5 to 8% in monthly benefits for every year you wait to claim your Social Security benefits after age 62, maxing out at age 70. If you can afford to do so, wait to claim your full benefit until age 70, as doing so can translate to a benefit that’s 32% higher than it would have been had you claimed your benefit at age 62.
• Budget for retirement.
Short- and long-term budgeting for retirement can help you assess how much money you will need to cover your expenses when you stop working. This step can help you understand how much a reduced or in-
creased Social Security benefit will affect your bottom line in retirement.
Remaining in the workforce full-time or even part-time can have a considerable impact on the size of your Social Security benefit. The CFPB notes that continuing to work for one or two additional years can replace low- or no-income
earnings from your earnings record, thereby increasing your benefit.
Surviving spouses receive the higher of the two spouses’ benefits. So it makes sense for the higher earning spouse to wait to collect his or her benefit until he or she reaches full retirement age.
The decision about when to claim Social Security retirement benefits is one all those who have contributed to the program must eventually make.
Leaving a legacy is something people start to think about as they grow older, but it’s easy to start planning a legacy regardless of your age.
A legacy is often the story of one’s life and the things he or she did through the years. The good thing about a legacy is it is never too early to begin planning. The following are some guidelines that can help people establish lasting legacies.
Grab a journal and start jotting down events that occur in your life. Mention particular achievements or notable things that occur from day to day. Pepper these accounts with stories of your family and childhood to start establishing an autobiography of sorts.
Even though people may imagine it is the grand gestures that are remembered most, quite often it’s the simplest acts that make the most impact. Think about the way you treat others each and every day. Smile at people, compliment others and offer positive advice when it is sought.
If the goal is to make money to leave for future generations, investigate your options. These
include assets that can retain their value. According to NewRetirement.com and Stepping Stone Financial, Inc., vacation homes mean a lot to families and they also can be a source of future revenue should they be rented or sold. Speaking with a financial adviser also can be a sound way to invest the right way to accumulate assets that can be passed down as a legacy.
With Roth IRAs, distributions are tax-free as long as the person who set up the IRA met the five-year holding period for contributions and conversions. Beneficiaries can have five years to take out money from the account; otherwise, they can convert the plan to an Inherited IRA, which stretches out distributions over their life expectancy.
A legacy letter is a way to speak directly to loved ones and say all those things that you had wished you told them earlier but maybe didn’t find the words or perhaps never had the time. The letter ensures others know just how much joy they brought to your life and the pride you had in knowing them.
