Roundlogo

Allon Planning

September 28, 2020 | Reading Time: 3.0 min

Medicare “Must Knows”

Except in some rare cases, we all need to have a plan for our retirement years. Each person has individual financial goals along with their personal savings situation. Hopefully, you have a personal financial advisor to help manage the savings you have accumulated. However, your healthcare is a “wildcard” during your retirement years, and you need to plan for it. Planning for retirement is one of the smartest things you can do, not only for you but your loved ones, too. Here are five helpful tips to keep your retirement plans on track.

Let’s look at the upcoming important dates for Medicare Open Enrollment

The next open enrollment period will run from October 15, 2020 to December 7, 2020, for coverage effective in 2021.

Do Not Underestimate Your Costs of Healthcare

Most people think they can cover their health expenses during retirement. 64 percent of people believe they will have enough money to cover their medical expenses during retirement. This could be a case of not looking at facts. Estimates show that an average couple needs $270,000 for retirement to cover their healthcare cost. This figure is just an average, so you may need more money in retirement to cover your healthcare cost. No matter what your situation is, you may need more money in retirement than you have available to you now.

Pre-Retirement Income Helps Determine How Much Medicare Will Cost

In fact, your pre-retirement income is a big factor in determining the cost of Medicare. The longer you remain in the workforce and contribute to Social Security, the more you can expect to receive during retirement. There are admittedly many other factors that contribute to how long one can remain in the workforce, including catastrophic illnesses and/or divorce and or death.

Do Not Overestimate Your Medicare Coverage

Keep in mind that Medicare, while very valuable, was not designed to cover all of a retirees health care expenses. There are four principal parts to Medicare coverage: Part A, Part B, Part C, and Part D. However, do not let the fact that there are four available parts to your healthcare coverage fool you into thinking everything is covered. These gaps in Medicare coverage can be covered with Medicare advantage or perhaps a Medigap plan. Medigap policies can help with some healthcare costs Medicare does not cover. An example of this would be a Medigap policy that covers deductibles and copayments.

Retirement Age is an Important Factor

Although not always possible, one needs to have a plan regarding at what age they will retire. Whether you retire before the age of 65 or after the age of 65 can make a difference in how much Social Security money one receives. Because this can be important day to day living or just as a supplement for other saved money, it is important to know what you will receive. When to retire also can be determined by factors such as health, desire to work longer, health or spouse’s health, offspring’s financial situation, or related matters.

Retirement: Current and Future

As of 2019, the odds of most Americans having security in their retirement has not improved. Retirement in America reflects distinct realities depending on affluence. The cost of Medicare keeps going up while the value of Social Security benefits continues to decline. However, a successful retirement for the affluent has improved. The lowest income households do not have as good of retirement prospects. In fact, baby boomers who are approaching retirement have seen their odds of a successful retirement fall from 26 percent, down to 11 percent.

Investment advisory services offered through Foundations Investment Advisors, a registered investment adviser ("Foundations"). The commentary on this blog reflects the personal opinions, viewpoints and analyses of the author, Jay Hagy providing such comments, and should not be regarded as a description of advisory services provided by Foundations or performance returns of any Foundations client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment, legal or tax advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of Foundations for services, execution of required documentation, including receipt of required disclosures. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Foundations manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Any statistical data or information obtained from or prepared by third party sources that Foundations deems reliable but in no way does Foundations guarantee the accuracy or completeness. Investments in securities involve the risk of loss. Any past performance is no guarantee of future results. Advisory services are only offered to clients or prospective clients where Foundations and its advisors are properly licensed or exempted. For more information, please go to https://adviserinfo.sec.gov and search by our firm name or by our CRD # 175083.