When you first enter the workforce as a young adult, retirement planning is usually not top of mind. After all, it’s decades away. But after spending the majority of your life working at one job or another, impending retirement can feel like an overwhelming event that you couldn’t have prepared for enough. You’ve contributed to a retirement fund regularly, so your day-to-day expenses should be covered. But how will your health be cared for when you no longer have employer-sponsored or career-supported healthcare benefits?
Here are your options for healthcare after retirement:
Medicare – Age 65+
Most people pay taxes into the federal Medicare program throughout their careers. These people, as well as anyone who already receives Social Security benefits, are automatically enrolled in Medicare Part A at no cost once they reach 65 years old. However, it’s advised that you enroll in Medicare three months before turning 65. If you did not pay taxes to Medicare during your career, you may purchase coverage. Medicare Part A is the most basic Medicare plan, covering inpatient hospital care, skilled nursing facilities and hospice care, and is subject to an annual deductible.
If you desire more comprehensive coverage, you may choose to enroll in Medicare Part B. This plan requires a monthly premium which is based on when you enroll, what the current rate is at that point, and income level. Medicare Part B helps cover doctors’ services, outpatient hospital care, physical and occupational therapy, and some home health care, and is subject to an annual deductible.
Medicare Part D is an optional plan that works in conjunction with your main Medicare Plan (Parts A, B, or C). This plan covers prescription drug costs and may require a monthly premium, along with a deductible, co-payment, or co-insurance for each prescription.
If you want additional coverage beyond Parts A and B, Medicare Part C is a plan that’s managed by private, Medicare-approved companies. Combining pieces from A, B, and/or D, Medicare Part C offers multiple plans with varying co-payments, co-insurance, and deductibles. These plans may cover medically-necessary services not covered by regular Medicare, like 24-hour access to nurses, coverage when you travel, and discounts on products like hearing aids and eyewear.
To select or change your Medicare plan, the Annual Enrollment Period is usually October 15th through December 7th of each year. Review your options, consider your financial situation, and consult your doctor for the best plan that meets your health and financial needs.
Retiring before age 65?
If you plan to retire before age 65, your healthcare choices are as follows:
- Some companies offer their employees full retirement health benefits. Inquire with your employer’s Human Resources department for more info.
- If your company doesn’t offer retirement health benefits, or they only offer partial benefits which you’d like to supplement, look into purchasing group or individual coverage. If you’re at least 63 and a half years of age, you are eligible to purchase COBRA coverage until you turn 65.
How are you planning to maintain your health in retirement? Tell us in the comments section below.
Sources: planforyourhealth.com and dol.gov