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I am all for retirement planning and currently max out everything I can. Over the weekend had a heart to heart conversation with a friend who has a very different view. He saves almost nothing and his argument is... "I don't want to put away money only to spend it all on health care when I get old". Instead, his plan is to retire poor, have social security pay for his daily needs, but at least he'll have government paid health coverage.
Pardon my lack of knowledge about healthcare costs and coverage when you retire, but how does one afford healthcare during retirement? You're no longer working, so there is no company sponsored health care insurance. How do you pay for all the medications you'll need, what if you need a procedure done at a hospital? God forbid, something like cancer comes along. With your 401k/ira/cash on hand savings, you're wealthy to the government. So how do you avoid losing all of that to healthcare costs?
Thanks.
Your friend isn’t paying attention to politics if he thinks that will work
Medicaid is different than Medicare
And both are on the chopping block for GOP politicians
Pardon my lack of knowledge about healthcare costs and coverage when you retire, but how does one afford healthcare during retirement? You're no longer working, so there is no company sponsored health care insurance. How do you pay for all the medications you'll need, what if you need a procedure done at a hospital? God forbid, something like cancer comes along. With your 401k/ira/cash on hand savings, you're wealthy to the government. So how do you avoid losing all of that to healthcare costs?
Thanks.
If you have inadequate insurance coverage, you can run up a lot of medical bills pretty quickly, and hospitals will require you to pay using your savings/assets.
You will have to pay for Medicare, for a supplement plan (covers the Medicare deductible and your 20% Medicare co-pay), and for prescription drug coverage. Medicare payments are scaled based on your income. The latter two are commercial insurance policies and costs vary considerably from state to state, but they increase every year. I pay ~$800/month for all three. Note that there are plenty of things that aren't covered, particularly in the realm of home care, and other things where coverage runs out before your need for the service does, like physical therapy, and a lot of drugs aren't covered or have high co-pays. Get the best supplement plan you can afford, and make sure your Part D plan covers the prescriptions you take.
This website has a lot of information and you can see what plans are available where you live and how much they cost.
A long gone friend's father was on Medicaid when he passed away. His description would not motivate me to want to rely on that type of "healthcare". The way he described it was they would only do so much to get you healthy enough to get out of the door. It didn't sound like a long term cure, just get you well enough to Not be their problem.
They did have to do some things like sign over the house to my friend so the Dad didn't have assets in his name so that he could qualify for Medicaid.
If Medicaid is your plan A, you didn't plan well in life...
or you can sign up for Medicare Advantage which is Plan C,then you do not need a medicare gap policy.
Best is you like the doctors in their network and you dont travel much.
MEDIGAP is no longer cheap,there is a company which offers independent living in San Fran,you get your own apt and 2 meals a day with plenty of social activities,and they pay for your medigap policy but recent years they have found it too much of a burden and much prefer your employer picks up the tab.
I am all for retirement planning and currently max out everything I can. Over the weekend had a heart to heart conversation with a friend who has a very different view. He saves almost nothing and his argument is... "I don't want to put away money only to spend it all on health care when I get old". Instead, his plan is to retire poor, have social security pay for his daily needs, but at least he'll have government paid health coverage.
Pardon my lack of knowledge about healthcare costs and coverage when you retire, but how does one afford healthcare during retirement? You're no longer working, so there is no company sponsored health care insurance. How do you pay for all the medications you'll need, what if you need a procedure done at a hospital? God forbid, something like cancer comes along. With your 401k/ira/cash on hand savings, you're wealthy to the government. So how do you avoid losing all of that to healthcare costs?
Thanks.
Your friend is wrong on several counts.
First off depending on the company he retires from there may be a company retiree medical insurance plan or a subsidy for you to buy your own policy. There may also be a pension plan or with a 401K a plan to turn those savings into a retirement income plan.
In retirement at 65 he may be eligible for Medicare. Needs to have worked 10 years for Part A (Hospital) to be paid. Persons with not enough credits will pay Part A premiums. Then there is a Part B that is usually paid with premiums deducted from Social Security. Between 65 & 67 Full Retirement Age get a bill from Medicare for the premium if not on Medicare yet. Medicare only pays 80% of the doctor bills. You would be responsible for the rest. This is where a private Medicare insurance plan pays. Depends what Plan you pick how much of the 20% is covered. Also need a Part D prescription drug plan to pay those costs.
I am all for retirement planning and currently max out everything I can. Over the weekend had a heart to heart conversation with a friend who has a very different view. He saves almost nothing and his argument is... "I don't want to put away money only to spend it all on health care when I get old". Instead, his plan is to retire poor, have social security pay for his daily needs, but at least he'll have government paid health coverage.
Pardon my lack of knowledge about healthcare costs and coverage when you retire, but how does one afford healthcare during retirement? You're no longer working, so there is no company sponsored health care insurance. How do you pay for all the medications you'll need, what if you need a procedure done at a hospital? God forbid, something like cancer comes along. With your 401k/ira/cash on hand savings, you're wealthy to the government. So how do you avoid losing all of that to healthcare costs?
Thanks.
U get a good lawyer to make your assets where they doesn’t count against you if you need Medicaid
Or SSI maybe…
You can get an Advantage plan that provides RX coverage
Often very cheaply to eek out your resources
Or you live a healthy lifestyle and arrange for healthy DNA via the right parents
My mom used Medicaid for her nursing home care because she and my dad were low income and their only asset was a very inexpensive home
or you can sign up for Medicare Advantage which is Plan C,then you do not need a medicare gap policy.
Best is you like the doctors in their network and you dont travel much.
Or if you never need treatment they don’t want to pay for .
Having a for profit insurer as your gate keeper vs not for profit medicare can be a big deal .
I never recommend an advantage plain if one can afford not for profit medicare and a supplement.
We witnessed first hand how you can be denied sensible treatment by a private insurer yet Medicare would have paid for the course of treatment if you had Medicare .
They can easily do it because you don’t have Medicare to prove what they would have paid for in your exact case and the insurer knows that .
The words nothing is ever a problem until it’s a problem were likely invented to describe an advantage plan
Since there’s no way in hell we plan on still being active in the workforce in our 60s and the ACA costs would be very high for us, I’m lobbying for the ‘retire to Spain even earlier and pay 250 euros a month’ option. Because housing in English speaking expat areas there is also pretty affordable too and we could have a lot of fun there with a far lower cash burn rate than in the States.
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