Healthcare can become a large expenditure when you reach your senior years, with many seniors reporting that funding their future healthcare bills to keep up with their changing need levels is one of their biggest concerns. As you become older, the help and support you need is likely to increase: you may need someone to come into your home to assist you for just an hour or two to begin with but this could develop into the need for a full time carer in your own property or a move into a retirement home, and both of these options can cost upwards of thousands of dollars every year. The fact is that your healthcare costs are likely to increase dramatically just as your income is shrinking as a result of your retirement, often making the books difficult to balance.
The True Cost of American Healthcare
The United States spends a huge amount of money on healthcare: more than any other developed country, with 18 per cent of the country’s gross domestic product (GDP) is spent on supporting the healthcare system and on related health care expenditure. According to a study conducted by the Employee Benefit Research Institute (ERBI), a U.S. couple retiring in 2012 would need to have saved $227,000 to fund their retirement healthcare in order to have a 75 percent chance of being able to pay for their future medical costs. Of course this figure doesn’t take into account any Medicare that the above-mentioned couple may be entitled to, but it does starkly demonstrate what huge costs are involved in senior healthcare in the United States: a cost we must all plan for and be prepared to pay for in order to have a retirement that is as comfortable and free from financial pressures and strains as possible.
How Seniors Can Be Proactive
The sooner you are aware of what your retirement healthcare needs might be, the sooner you can start to make a comprehensive savings plan in order to afford them. Regardless of your age, this is something to think about now. Financial advisors recommend that you begin planning for your anticipated retirement medical costs at least ten years before you plan to retire. When making these decisions you should consider your anticipated coverage requirements, whether you will face a gap between your employer-sponsored medical insurance and the Medicare you anticipate you will receive, your current medical expenditures (and whether you know that these are likely to increase) and whether you are going to need long-term care insurance. If you are married or in a long term partnership then it is important that you take the time to discuss these issues in full with your spouse, so that you both know where you stand. It is particularly important to look at your senior healthcare costs if you are thinking of retiring early, as this will leave a larger gap between your employer-sponsored medical insurance and your Medicare that you will have to self-fund in the interim, and depending on your individual healthcare needs, this could push up the costs of early retirement so significantly as to be prohibitive.
Of course it is possible to minimize some of your healthcare expenditure simply by looking after yourself as early as possible as you begin to age. Exercise can help to keep your body supple, improving your mobility, reducing your risk of developing obesity and obesity-related illnesses, and helping to improve the symptoms of other age-related illnesses, such as arthritis. Your diet can also have a huge impact on your general levels of health. Cutting the amount of saturated fat you eat can help to prevent heart disease, for example, whilst eating a diet full of rich green vegetables can keep both your blood and your brain healthy. Whilst it is not possible to reverse the aging process, nor should you want to, by taking care of your body through diet and exercise and having a positive mental attitude, you can help to reduce the amount of healthcare support you are likely to need and, ultimately save some money for the other things you were hoping to do with your retirement.