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Published On: Mon, Mar 30th, 2020

4 Things to Consider When Planning for Retirement

Part of planning for retirement means planning for expected and unexpected healthcare costs, which means you’ll need to start shopping for coverage well ahead of time. Turning 65 means you’ll be eligible for Medicare, and choosing the right plans can help ensure you’re always covered no matter what. A Medicare Advantage Plan can help with that. Let’s take a look at just what a Medicare Advantage plan is and how you can increase your income and reduce your spending so that you can afford any expense that comes up.

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What is a Medicare Advantage Plan?

If you’re new to Medicare, you might be wondering, what is a Medicare Advantage plan? A Medicare Advantage (MA) Plan, also known as Medicare Part C, is a plan that carries all of the benefits of Parts A and B. That means it covers your hospital and medical costs and usually also includes Medicare Part D, which covers prescription medications.

With a Medicare Advantage Plan, all of these services are combined into one affordable and convenient plan. Anthem offers a variety of health insurance plans you or your loved ones can enroll in based on the type of lifestyle you (or they) live.

Things to Consider

Before you dive headfirst into determining medical care costs, it might be even more beneficial to think about how to reduce your spending and increase your income during retirement.

1. Adjusting Your Spending Habits

Planning for retirement means not only saving as much money as you can before the time comes but also spending less. Naturally, some types of spending might decline with age, such as the amount you spend on traveling or going from using two cars to just one.

Adjusting your spending habits can ensure that you have enough money to cover the various costs associated with medical care in your golden years. Cut back on unnecessary expenses and consider reviewing your budget for things you can do without. The online budget tracker Mint can help you better understanding your spending habits and adjust accordingly.

2. Considering Alternatives to Saving to Cover Healthcare and Retirement Costs

Social Security replaces only about 40 percent of working-life income for most seniors, according to Investopedia. That means if you don’t have adequate savings, you’ll need to find the money elsewhere to cover your healthcare costs. Some of those alternatives include a health savings account, long-term care insurance, short-term care insurance, critical illness or critical care insurance, deferred annuities for after retirement, or annuities with long-term care riders. If you’re unsure of what path to take when it comes to covering retirement and medical expenses, talk to a financial advisor so he or she can help you go over your options.

3. Finding Ways to Stay Healthy

One of the best things you can do to combat the rising cost of healthcare is to find ways to stay healthy so you limit the possibility of getting sick or injured. This includes exercising (without overexerting yourself), eating healthy, getting proper dental care, and taking care of yourself if you do happen to get sick. Don’t wait to go to the doctor and risk something small turning into something much bigger and becoming more difficult to treat.

4. Creating Additional Income Streams

If you’re worried that your expenses will be too high for the amount of money you’ve saved, despite your Social Security benefits, you can always find ways to create new income streams during retirement. Whether you decide to invest a portion of your savings in dividend-paying stocks, purchase rental property, start a business, get a reverse mortgage, or cash out your life insurance policy, you can find a way to generate additional income in your retirement that works for you.

Planning for your retirement years might seem daunting at first, but with the right tools and resources, you’ll be well on your way to a happy and healthy retirement. With the above in mind, you can start thinking about what Medicare plans are right for you or your loved one, and how to maximize your income and reduce your expenses so that when it’s time to retire, you’ve got everything in order to retire the way you want to.

Author: Carol Trehearn

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