Health care costs continue to rise, causing many employers to reduce health care coverage or pass the costs on to their employees and retirees.
It is more important than ever for you to understand what health-related benefits your employer offers. And be sure to take advantage of any wellness programs your company offers to stay healthy and reduce future medical expenses.
- Schedule health risk assessments for each family member, which may help you anticipate expenses.
- Be sure you understand the coverage, premiums, contributions, available service providers and out-of-pocket maximums for your plan.
- Consider a high-deductible plan to save money if you’re healthy and usually have low medical expenses.
- Expect and plan for unexpected medical costs by building an emergency fund.
- Determine whether long-term care insurance is appropriate based on your age, health, retirement income and assets.
Health savings and spending accounts
Your employer may offer a tax-advantaged option for paying medical and dependent care expenses, such as:
- Flexible Spending Accounts (FSAs). Contributions are made before taxes and can be used to pay qualified medical expenses. Plus, you can withdraw the full amount of the account on the first day of the plan year for qualified expenses.
- Dependent Care FSAs. Contributions are made before taxes and can be used to pay child or dependent care expenses for children under age 13 or dependents who are physically or mentally unable to care for themselves.
- Health Savings Accounts (HSAs). They may help you reduce taxes and set aside money for current and future qualified medical expenses. They are available with certain high-deductible health plans.
Disability insurance may help you pay bills while recuperating from an illness or injury, but keep in mind:
- It’s easier to get coverage if you enroll before you develop a chronic condition, such as diabetes or heart disease.
- Programs such as Social Security Disability Income may not be sufficient to support you or your family.
Talk to an investment professional to find more ways you can plan for medical and health care expenses in retirement.