What healthcare costs should I consider in retirement?

Since healthcare costs increase as you age, it's crucial to have a plan. Below, we'll cover the healthcare costs you'll likely encounter in your 60s, 70s, 80s, and beyond, along with practical tips to help you manage expenses.

Healthcare in your 60s:

Getting started with Medicare and staying healthy

It's great if you’re able to stay healthy and active in your early retirement years. You can use the time to get serious about setting up a solid healthcare plan.

Medicare basics

When you turn 65 (or earlier if you have certain qualifying disabilities) you're eligible for Medicare, the federal health insurance program for seniors. Medicare has several options to know about. At a glance:

• Part A is hospital insurance. It covers hospital stays, skilled nursing facility care, hospice care and some healthcare.
• Part B covers outpatient care, certain doctors’ services, medical supplies and preventive services.
• Part C (Medicare Advantage Plan) is a type of Medicare-approved health plan from a private company that you can choose to cover most of your Part A and Part B benefits instead of Medicare parts A and B.
• Part D is prescription drug coverage. This is extra coverage that people with Medicare can choose to help with the cost prescription drugs.

Visit https://www.medicare.gov/ to enroll.

Consider Medigap or Medicare Advantage

Medicare doesn't cover everything, so many retirees choose either Medigap or a Medicare Advantage plan to cover costs like deductibles and copays. Medicare Advantage often includes extras like dental or vision, which can be a big plus.

Visit https://www.medicare.gov/ to see which option might be best for you.

Purchase travel insurance for medical emergencies abroad

Many retirees are active and mobile and enjoy traveling during this stage of retirement. However, it's important to remember that Medicare generally doesn't cover health services outside the U.S. Having travel insurance can cover medical emergencies abroad and provide peace of mind during trips.

Tips

• If you're planning to enroll in Medicare, consider enrolling as soon as you're eligible to avoid late penalties, which can make premiums more costly over time. Visit https://www.medicare.gov/ to enroll.
• Compare Medigap and Medicare Advantage to see which fits your health needs and budget best. As your healthcare needs can change, revisit this choice every few years. Visit https://www.medicare.gov/ to see which option might be best for you.
• When planning a trip, shop around for travel insurance that includes comprehensive medical coverage.

Healthcare in your 70s:

Managing medical needs and prescriptions

In your 70s, many retirees head to the doctor more frequently and need regular prescriptions. Here's what to expect in this decade:

Rising Medicare and Medigap premiums

Premiums for Medicare and Medigap can increase in your 70s, especially if your income rises or you require more services. Monitoring these costs and adjusting your plan as needed can help you manage expenses.

Increasing prescription drug costs

Prescription needs often increase during this stage, as many people take medication for chronic conditions. If you have Medicare Part D, remember that you may encounter a "coverage gap" or "donut hole," where you pay more out-of-pocket for prescriptions.

Planning for mobility aids

If you need mobility aids, like walkers or stairlifts, Medicare covers all or a portion of these under Part B if deemed medically necessary.

Tips

• Compare Medigap plans or Medicare Advantage options each year to ensure you get the best deal for your coverage needs. To find a deal that meets your unique needs visit https://www.medicare.gov/.
• Review your Part D plan annually, as plan costs and coverage can vary yearly. Look for a plan that covers your medications at the lowest price.
• Start researching long-term care options. Planning early can help you understand costs, coverage options, and the type of care that best suits your needs, so you’re prepared if and when the time comes.