Thinking of Retiring? Ask Yourself These 5 Healthcare-related Questions First

So you’re looking to retire. Maybe you want to pursue hobbies that you’ve put off for too long, travel, or just enjoy time with your family. Whatever the motivation for your decision, you have a lot to consider, and health care should be among your top concerns.

Before you retire, here are five questions you should ask yourself to ensure that you’re ready for the health-related considerations ahead:

1. What age is best to retire?

The big thing to remember here is that Medicare doesn’t kick in until you hit age 65. If you retire before that, you’re going to need some kind of insurance to cover the gap until you become Medicare-eligible. If your spouse is still working and you can get on his or her plan, that may be the best solution.

Another option is COBRA coverage through your former employer. If you’re unfamiliar with COBRA, it’s a federal act that, among other things, requires employers with at least 20 workers to allow ex-employees (including retirees) to stay on an employer-sponsored health plan for 18 months. Be mindful that you’ll probably have to pay for the premiums that your employer may have defrayed while you were still working, so that will be an added cost.

You can also check into an Affordable Care Act Plan (Obamacare). Another option is a short-term plan to get you by until you hit 65, but these are usually only an option for people who are in good health and free of any major pre-existing conditions.

2. Do my savings include money for healthcare not covered by Medicare?

According to a 2018 report from Fidelity Investments, the average 65-year-old couple will spend over $275,000 on health care for the duration of their lives. Good health insurance can help defray that, but it’s surprising how the little costs add up.

A lot of people think Medicare is a free ride, but this is not the case. You’ll still need to budget for co-payments, coinsurance percentages, and monthly premiums. For example, a deductible (the amount you pay before your insurance coverage kicks in) for a hospital stay was about $1,364 in 2019. As for premiums (the amount you pay to have Medicare), the average cost was $135 per month in 2019. For those in the category of “high-income earner,” those expenses were higher. For example, people earning between $160,000 and $500,000 paid nearly $300 extra per month for their Medicare premiums.

Medicare is a bargain compared to many other insurance plans, but you still want to make sure there’s enough padding in your budget for uncovered expenses.

3. Do I want add-ons or alternatives to traditional Medicare?

If you opt for traditional Medicare, that doesn’t come with a prescription drug plan. If you take a number of medications, you may find it worth it to add on Medicare Part D (which defrays prescription drugs) or forego traditional Medicare in favor of a Medicare Advantage plan. The Advantage plans often include prescription drug coverage, but they don’t usually come with nationwide coverage, and some of the plans involve a limited choice of doctors and the need to get a referral from a primary care provider every time you need to see a specialist. And Medicare Advantage still requires you to pay deductibles and copays that can add up.

4. How is my physical and mental health?

If you have a good insurance plan under your current employer, you might want to look into treating all that ails you—especially if you’re retiring before age 65 and won’t yet be Medicare-eligible. Get a physical and find out if your doctor recommends any treatments or procedures.

You should also look into dental and vision concerns, which are not typically covered by Medicare. If you currently have dental insurance, get a dental exam with x-rays and take care of any fillings or restorative work. If your current insurance covers eye care, make sure to get a thorough eye exam well in advance of retirement.

5. How are my health habits?

There’s a lot of debate about whether retirement is good or bad for your health, but one of the more significant recent studies on the topic seems to indicate that it can be detrimental. According to the Harvard School of Public Health’s U.S. Health and Retirement Study involving nearly 5,500 individuals, retirees are 40% more likely to have a heart attack or stroke than those who are still working.

We tend to think of retirement as a gateway to a time of easy living when all of our cares and troubles go away, but it is actually ranked 10th on the list of life’s most stressful events (as reported by the American Institute of Stress). Prepare for it by being up to the challenge physically and mentally. If you are not in the habit of exercising regularly, start today. The same goes for eating healthy. Make sure that you have a good social network outside of work so that you have friends to help ease your transition to retired life.

Ensure that you have plenty of things to engage your mind post-retirement, whether it be learning a new skill, tackling a home improvement project, participating in sports activities, or starting a new hobby.

In conclusion…

The retired years can be some of the greatest, but most people don’t luck their way into happy results. A fulfilling retirement is often a result of careful preparation. Start today to make sure that that your experience post-work is as healthy and enjoyable as possible.