Planning for Healthcare – Preparing for Health Care Costs in Retirement

While many of your employees are likely still years away from the retirement, with an aging population and an increasing allotment of savings dedicated to other costs, it is important to begin preparing for health care costs in retirement early.

As a recent article in Investopedia pointed out, lifetime healthcare costs for a healthy 65-year-old couple retiring in 2015, who is covered by Medicare Parts B, D and a supplemental insurance policy, will total $266,589. Add in dental, vision and other costs and the figure goes up to $394,954. No matter how you look at it, this is a lot of money. Given that these costs are likely to eat up a huge part of most people’s savings it is important to be prepared for how to best handle them.

While Medicare will generally be the go- to solution for most people once they qualify, it does not cover all costs and leaves individuals on the hook for deductibles, out of pocket expenses, etc. And while the idea of a Health Savings Account or HSA plan is not new to most people, it is often overlooked as a true mechanism to save for retirement.

As a recent stories by the invest site Motely Fool pointed out, a Health Savings Account (HSA) is one of the most underappreciated vehicles for savings and investments in America. For someone who is strategically planning for retirement costs, enrolling in a HSA plans makes a lot of sense. The idea of accumulating a nest egg for healthcare costs for retirement rarely crosses someone mind, but the tax benefits of a HSA plan offer unparalleled opportunities for retirement savings.

HSA plans do not need to be overwhelming or confusing. But instead when implemented wisely can be the catalyst to get employees, no matter their timeline for retirement, on the road to saving money. No matter if you are 30 years or 3 years away from retirement, accumulating savings for healthcare costs is an often overlooked item that is going to get a lot folks in financial trouble one day, make sure it doesn’t happen to you.

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