Planning for health care after retirement may seem intimidating, especially as health care costs continue to rise. But as with any major undertaking, careful planning is the path to a better outcome.
First things first
To begin, you’ll want to start with the basics:
- Know the plan(s) your employer offers. Be sure you understand the coverage, premiums, contributions, available service providers and out-of-pocket maximums.
- Consider a high-deductible health plan (HDHP). This can save you money if you’re generally healthy and have low medical expenses.
- Schedule a Nationwide® Health Care Cost Assessment for yourself and your family members. This may help you anticipate future expenses.
- Expect the unexpected. Plan for any surprise medical costs by building emergency savings.
- Remember that above a certain threshold, even out-of-pocket medical costs can be tax-deductible
Health savings & spending accounts
Speaking of taxes, your employer may offer tax-advantaged options for paying medical and dependent care expenses. The most common tools of this type are FSAs, Dependent Care FSAs, and HSAs.
What is a Flexible Spending Account (FSA)?
Your contributions are pre-tax, to pay qualified medical expenses. You can even withdraw the full amount on the first day of the plan year for qualified expenses.
What is a Dependent Care FSA?
Your pre-tax contributions can be used to pay child- or dependent-care expenses for children under age 13 or dependents who are unable to care for themselves.
What is a Health Savings Account (HSA)?
Available with certain HDHPs, these can help you reduce taxes and set aside money for current and future qualified medical expenses.
Use our resources to learn more about managing health care costs and long-term care planning. Once you’re ready, talk to an investment professional to find more ways to plan for medical and health care expenses in retirement.
This material should be regarded as educational information on health care only and is not intended to provide specific health care advice. If you have questions regarding your particular situation, you should contact your health care, legal or tax advisor. While Financial Advisors may discuss health care costs as part of a client's retirement plan, Financial Advisors may not provide specific advice on health care coverage options.