Serving to purchasers handle retirement healthcare prices
What you need to know
- A 65-year-old married couple can expect to spend $ 300,000 on healthcare costs in retirement, excluding long-term care.
- HSAs can be a great way to save those costs.
- Customers need your help planning these significant expenses before they reach retirement age.
In his most recent poll Fidelity Investments tied the cost of retirement health care at $ 300,000 for a hypothetical couple aged 65 and over. It estimates the cost for a single woman at $ 157,000 and for a man at $ 143,000. That $ 300,000 represents an 88% increase over Fidelity’s first survey in 2002 and a 30% increase over the past 10 years.
Health care costs include things like medical supplies and prescription drugs. You can also contain Dependency, that are not part of the Fidelity number.
Health care costs are one of the biggest expenses your retired customers will have. Helping your clients deal with these costs is an important part of the retirement planning that you carry out for them.
Before Retirement: Use HSAs
If your customers have access to a. to have Health Savings Account (HSA) While at work, this can be a great way to build tax-free savings on retirement healthcare costs. HSAs are available with high deductible health insurance plans. The beauty of HSAs as a retirement vehicle is that the money deposited can be carried over from year to year if it is not used to reimburse current medical expenses. The contributions are paid before taxes, which also results in a tax advantage for the current year.
That money can then be used in retirement to cover Medicare premiums, deductibles, and a range of qualified medical expenses, including items that Medicare may not cover. Payments for qualified expenses remain tax-free. Any money that is not used for medical expenses can be used as a. be lifted off IRA retired even though taxes are due.
Many HSAs offer investment options that can help increase these additional retirement benefits. Once your customers are on Medicare, no further HSA contributions are allowed.
Early retirement: fill the Medicare void
For customers who retire at the age of 65 before reaching Medicare eligibility, they must plan how to cover their healthcare costs in this “void”. In this day and age, customers are all too often forced into early retirement by downsizing in their company.
In the event of a customer downsizing, some options for coverage may include:
- COBRA coverage from your former employer. While this is an expensive option, it can help ensure continued coverage either until they are Medicare eligible or until they find a better coverage option.
- Some employers may offer their employees continuous health insurance as an incentive to take up a job offer.
- If the spouse is employed, the customer can take out insurance through the spouse’s employer.
- Coverage through your state’s health insurance market.
For clients planning an early exit from the corporate world, consider incorporating health insurance into the planning work you do for this life change.