Medical Costs During Retirement and Preparing for the Unexpected

On this episode of A Wiser Retirement™, Casey Smith is joined by Logan Steele from Steele Choice Insurance to talk about medical costs during retirement and preparing for the unexpected. They go over Medicare, long-term care, healthcare costs, Medigap, and traveling overseas for medical procedures.

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Contrary to popular belief, Medicare is not a bad deal, and in fact, it often provides better coverage than corporate insurance. People may be concerned about losing their doctors or facing higher costs, but Medicare generally offers a higher level of coverage with lower deductibles and wider access to care. Medicare supplement plans, in particular, have zero networks, meaning that as long as a provider accepts Medicare, they will also accept the Medicare Supplement Plan. The cost of care on Medicare is also more manageable, with a $240 deductible under Medicare Part B. Overall, the transition to Medicare can be a positive one, with comprehensive coverage and affordable costs.

Healthcare Costs for a Couple Ages 65 through End of Life

The cost for medicare premiums, prescription drugs, and dental care was estimated to be $315,000 in 2023, but when long-term care is included, the cost doubles to $662,000. The speaker notes that about 70% of people aged 65 and above will require long-term care, and most do not have long-term care insurance. The cost of long-term care varies greatly between states, with Georgia having lower costs than Minnesota, where the cost for nursing home care is over $170,000 per year compared to $89,000 in Georgia. Assisted living costs an average of $4,300 per month in Georgia and $6,700 per month in Washington. It’s important to look into how the costs vary by state.

Long-Term Care Costs and Insurance

It is important to plan ahead for long-term care and medical costs in retirement, which can be significant and may not be fully covered by Medicare. Some states mandate long-term care insurance, but the costs keep increasing just before the mandate, leaving individuals to pay higher premiums. In states without mandates, the cost is lower. A long-term care policy can be utilized to protect assets and pass them on to the next generation. However, some individuals may choose to go without a policy and rely on state care instead. There is software that can help determine the difference between keeping the money invested versus pulling it out to pay for care. Be proactive and plan for medical expenses in retirement to ensure financial security.




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