Budget Hater

Saving For Future Healthcare Costs

Posted by Aaron Coleman
Nov 08, 2013
In many of the recent classes I have taught, people asked a common question: How do we save for healthcare costs in retirement? 

Good question.  And unfortunately, there is no easy solution.  The answer is save now and save often.   According to the latest research, seniors will pay more for healthcare than they do on food in their retirement years.  Healthcare reform and the numerous changes taking place now and in the future aside, it is safe to assume we will ALL need some money designated for healthcare expenses in our later years.  

Here are some very basic ideas to help you start saving for healthcare costs in the future.  As always, I highly recommend contacting your trusted financial advisor and building a comprehensive plan to make healthcare savings a reality: 

1)  Save the College Cash.  Many people I talk with save money each month for their kids’ college education.  Once the kids are done with college, keep saving that same amount of money in a designated healthcare fund.  This can be as simple as a savings account at your bank or an investment account with your financial advisor.   If you can find a tax-deferred plan, even better. 

2) Adjust Your Plan.  If you are currently saving money each month for retirement, talk with your financial advisor about creating a separate investment account just for healthcare and start putting a percentage of your savings into that account.  You may need to adjust your budget to accomplish this. 

3) Plan Ahead.  Perhaps you have big travel plans scheduled for retirement.  Perhaps you have some major items you plan to purchase.  If you feel you might need extra savings for your healthcare costs, consider your travel and major purchase plans carefully.  Cut back if you feel you might need that cash. 

4) Save More.  This one is really not that complicated.  It’s not that fun either.  If you feel your savings is a bit light, bite the bullet and start saving as much as you can.  Forgo the leisurely spending and tighten the belt.  It will start to add up over time and you will one-day be glad you did.  If you are on a fixed income, this becomes even more important. 

5) Negotiate Your Care.  Make your dollars go further.  Hospitals, doctors and clinics will sometimes negotiate care if you are willing to pay cash for certain procedures.  For instance, if you are looking at a knee replacement, don’t take the first estimate.  Shop around and find a great deal.  This is becoming more commonplace than people realize.  It might not always be an option in your market, or if the insurance company is involved, but it should be considered when evaluating your care options. 

6) Incorporate Wellness NOW.  Start living the very best life you can starting today.  Eat right, exercise, and stay active.  Cut down on the negative vices.  The best away to manage excessive healthcare costs is to avoid them in the first place.   That means you need to start that healthier lifestyle today. 

No one quite knows what the healthcare system will look like in the future.  Preparing now can help you manage the financial pain later.  

Aaron Coleman 



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