The U.S. is facing a massive healthcare crisis. The problem is that there are many Americans who are living longer than ever before, but their retirement savings aren’t keeping up. In 2022 an average 65-year-old retiree is projected to pay north of six figures for healthcare over their remaining years. But if you’re among the many Americans struggling with your health care costs during retirement years, you have options available that could help prevent you from going broke during this time:
There are many ways you can prepare for higher health costs in retirement.
1. Making strategic withdrawals from retirement accounts. Making strategic withdrawals from retirement accounts can be a smart move in the event that healthcare costs are higher than expected. When withdrawing from a retirement account, it is important that the amount of money withdrawn covers all expenses while leaving enough behind to pay future medical bills without running out of funds.
2. Purchasing long-term care insurance. Long-term care insurance is a type of coverage that can help you pay for costs associated with long-term care and certain assisted living services. Medicare does not provide long-term care coverage or custodial care unless medicare care is needed.
3. Starting an annuity to manage health care costs. If you’re worried about having enough money to cover future healthcare costs, an annuity is an option that can help. An annuity is a contract that pays you a fixed sum of money in exchange for a lump sum or regular payments. It is primarily used as income steam for retirees.
4. Picking up extra work during your retirement years Earn extra income during your retirement years so that you don’t outlive your money! Added bonus: it will help keep things interesting, keep you active, as well as help keep boredom at bay!
While it’s never easy to think about the future, it’s important to plan ahead so that you don’t run into any surprises when it comes time to retire. Even if you feel like you have enough money saved up, health care costs can be unpredictable and expensive. By taking some simple steps now—such as starting an annuity or purchasing long-term care insurance—you can ensure that your golden years will be just that: golden!
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