The idea that retirees spend less than their actively employed counterparts is a staple of retirement planning, but is it really the truth? If you are banking on spending less once you stop working, you could be in for a rude awakening. In this article, Medicare Subsidy discusses how your medical bills and prescription costs can go up after retirement making you spend even more money than you do now.
If you’re like many people, you look forward to your retirement years. You may have plans to travel, shave a few strokes off your golf game, or spend more time with your family. Regardless of how you’d like to spend your golden years, you probably have lots of questions about how it will work for you financially.
Most people assume that some expenses will go down in retirement, and that’s usually the case in some areas of their budget. Because many seniors wait to retire until their home is paid off, having no mortgage can take a lot of pressure off the budget. But some expenses will likely increase as well. The one area that is likely to offset any relief from paying off the mortgage is increased health care costs.
If you plan to travel the world after retirement, you will have travel expenses to consider. If you don’t own a home and will be renting, those expenses will also likely increase incrementally during your retirement. The most significant increase in spending will probably come from medical and prescription drug expenses.
Experts suggest that retirees should expect that approximately 15% of their retirement expenses will be related to health care each year. Some estimates say that an average 65-year-old couple needs $285,000 to spend on health care over their retirement.
The lifestyle you choose to live during retirement can affect your budget as well. Jetting around the world is expensive, and if you have the resources to do that, enjoy it. Whether it’s global circumnavigation or needlepoint that you choose, staying healthy will make all the difference. How much you enjoy your retirement years and how well your budget stretches both depend on your health.
For most people, Medicare will play a significant role in how much health care costs during retirement. As David Carradine says in his role as Caine in the old television series Kung Fu, “Choose wisely grasshopper.”
Medicare and the related choices and options are, to be generous, complicated. There are multiple parts of the program, and some parts can be purchased from the government and others from private insurance companies. It is little wonder that the most popular Medicare option is the simplified Medicare Advantage plan. Purchased from your favorite health insurance provider, Advantage plans are regulated by the government but designed to replace Original Medicare with its multi-part scheme.
In the end, when you retire, you will spend less on some things and more on others. Keeping yourself healthy and selecting the best Medicare option for your circumstances are two important ways to ensure you have the resources necessary to enjoy what should be the best years of your life.
About Medicare Subsidy
Medicare Subsidy is a company that provides resources related to Medicare Advantage, Medicare Supplement, and Prescription Drug plans. The company works to help people 65 and older with low or fixed income save thousands annually from premiums, deductibles, and copayments. Medicare Subsidy makes the process of qualifying for benefits seamless and straightforward for their clients.