Strategies for Early Retirement Healthcare [Video]

by Financial Design Studio, Inc. / June 5, 2023

One of the biggest concerns for retirees is how to find healthcare for an early retirement.

Hi, I am Michelle Smalenberger, a fee only financial advisor here at FDS. Be sure to subscribe to our channel if you find these videos helpful!

Today’s topic is healthcare in retirement.  The main items we will be covering are the concerns near-retirees have about these costs.  We will discuss how you can plan for these expenses and ways to save.  

Before we dive in I want to let you know we have a detailed, written blog post that shares more historic statistics about inflation of these costs you may enjoy understanding.

What Do You Need to Know?

  1. Concerns about Healthcare costs in retirement.  What are we talking about?
    1. Medicare costs will likely continue to increase
    2. The time in your life you need healthcare the most is as you age
    3. You’re hoping you’ve saved enough to cover the needs these costs

This means that someone well before Medicare age may be looking at higher costs for healthcare if they retire early.  

For all retirees you’re also looking to find the most affordable, quality, health insurance for you. Just like when you were working you may have to evaluate your options every year.

  1. How can you begin to plan for this expense?
    1. There are a few items we know:
      1. Healthcare inflation costs have been on average 6% per year.
      2. We know the Medicare premium costs to use as a starting point
    2. What we don’t know is if you’ll need longer term care such as assisted living
      1. But we can build in assumptions for this level of care for an average time of 2-5 years to see if your plan can cover these expenses.

This topic is important for you to consider as a near-retiree because you need to have a plan for the expenses you assume you’ll have.  

  1. How to plan ahead for these costs:
    1. Saving to an HSA – reference this video.
    2. Utilizing your employer provided retirement health insurance
      1. This typically happens naturally as your employee retirement insurance benefit moves to be secondary after Medicare coverage.
    3. Purchasing a secondary policy to cover your specific needs
  1. These costs can be saved for!  They are not too high that it’s impossible to plan for.  And there’s enough information available that we can get close to expected costs to plan for.
    1. You need to remember that your income will affect the cost of Medicare to you.  This is why a plan matters.  Your social security, pension, and assets you start to withdraw could affect the cost of your healthcare. 

So don’t leave it to chance. Let’s start building your plan today so you can have the confidence you need. Thanks for watching! 

Next Steps for Early Retirement Healthcare

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