Health, Meet Wealth

65 Years YoungLife expectancy is on the rise. Today, a 65-year-old man may expect to live to 84, and a 65-year-old woman to 86. One in every four 65-year-olds could live past 90. (Source: Social Security Administration, 2012)

Twenty-plus years of retirement may sound great, but it may also bring worries about finances.

As of 2010, 44% of households headed by 50- to 59-year-olds could be short of the retirement income needed to maintain their standard of living—even after working to age 65 and tapping into reverse home mortgages. The same is true for 55% of households headed by 40- to 49-year-olds and 62% of households headed by 30- to 39-year-olds. (Source: National Retirement Risk Index, 2012)

Out-of-pocket health care costs, in particular, may come as a surprise in retirement. The 2013 Medicare Made Clear Index showed that 35% of current Medicare beneficiaries surveyed found out-of-pocket Medicare costs to be more than they expected to.

If you are already retired, it’s important to have a solid financial plan that makes the most of your savings and other assets. You may want to work with a financial planner or another resource to help you manage your accounts.

If you are still working, you can take steps now that may help set you up for a financially successful retirement. Here are some ideas.

Open a Health Savings Account (HSA), if available. These pre-tax dollars may be used to cover qualified health care expenses. Unused amounts remain in your account and may be used to pay health care expenses in retirement.

Make retirement savings a priority. Make catch-up IRA and other investments if you qualify and can afford it. You may want to consult a financial advisor to help you create a savings plan that includes all your assets. Also, ask about long-term care insurance.

Consider working longer. Every year that you continue working is a year you may be able to add to, rather than spend, your savings. In addition, your Social Security payments increase the longer you wait to start drawing them. You receive the maximum monthly amount when you wait to age 70.

Explore private health insurance options, if applicable. You may need to buy coverage if you decide to retire before you’re eligible for Medicare at age 65. You may be eligible for COBRA or you may buy insurance through your state or the federal exchange. You should understand the costs of these options.

Learn about Medicare. You have choices to make when you enroll in Medicare, and you will likely have out-of-pocket costs. For many, this is the first experience buying health care insurance. Become a savvy shopper and be prepared.

–This information was provided by Medicare Made Clear –  George Litchfield Insurance can serve all of your insurance needs. Whether it be Medicare Supplements, Health or Life Insurance. Call us today at (909)792-3300

You’re 65 and Working: What about Medicare?

Retirement used to be closely linked to turning 65. No more. The full retirement age for anyone born in 1943 or later is at least 66. It’s 67 if you were born in 1960 or later. Full retirement age is the age at which you can receive 100% of your social security retirement benefit.

Medicare eligibility still begins at age 65, even if retirement does not. The question is: What do employed 65-year-olds do about Medicare?

Medicare Before You Retire? Maybe

If you or your spouse is working, then you may have health insurance through an employer. It’s important to understand how Medicare can work with your existing insurance.

Before you do anything about Medicare, you need to talk with your employer human resources department or health plan administrator. Questions you may want to ask include:

  • What kind of health plan do I have? For example, many employer plans are HMOs (health maintenance organizations).
  • How would my health insurance change if I enrolled in Medicare?
  • How much is deducted from each paycheck for health insurance? (Remember that you do not pay taxes on payroll deductions for health insurance. You need to consider the tax savings to determine the total value.)

This information will help you evaluate your Medicare choices and decide what’s best for you.

Enroll in Medicare Part A? Probably

Most people enroll in Medicare Part A (hospital coverage) when they turn 65, whether they are working or not. This is because Part A is premium free for most people. You earn this benefit by paying into the Medicare program while you’re working. You qualify for premium-free Part A if you or your spouse contributed to Medicare for at least 10 years.

In general, hospital expenses are covered first by your employer plan. Part A may not contribute much. It’s still a good idea to enroll as soon as you’re eligible, as long as it doesn’t cost anything. That way you won’t have to worry about signing up later.

You may want to delay Part A if your employer plan is a Health Savings Account (HSA). If you enroll, your employer may stop contributing to your account. You could be caught short when paying health care expenses. It’s very important for you to learn how Medicare may change your benefits.

Enroll in Medicare Part B? Depends

Medicare Part B (doctor and outpatient coverage) charges a premium. In 2012, the premium amount starts at $99.90 per month. It’s more for people with higher incomes. lists the Part B premium amount by income.

Many people who have employer coverage delay enrolling in Part B to postpone paying the premium. You can sign up later during a Special Enrollment Period without penalty.

Part B may be of limited value when you have other health insurance. Exceptions may be people who are self-employed or who work for an employer with less than 20 full-time employees. In these cases, health expenses would be paid first by Part B.

It’s very important to find out how Part B would work with your employer plan before making your decision.

Explore Your Choices

You have a number of Medicare decisions to make when you turn 65. This is especially true when you have other health insurance. You may want to start learning about your choices ahead of time. Preparation can help you get the coverage that best meets your needs and avoid unnecessary costs.

–This information was provided by Medicare Made Clear – Turning 65 ? Looking for reliable Medicare Insurance? or Looking to get better rates. Call the Litchfield Insurance Agency today at (888) 891-5557.
Whether it be Medicare, Health, Life. We will find the right plan for you. Serving Redlands, Banning, Yucaipa and the Inland Empire.