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Do You Need Health Care & Long-Term Care Insurance in Retirement?

Seth Jentner03/28/2016

Retirement brings a new set of challenges and changes. If you are approaching retirement or already retired, you should review your potential risks and various insurance coverages to ensure that your protection matches your needs.

There are two types of insurance that you should consider as you move toward retirement: health care and long-term care.

Health Care

When you turn 65, you are entitled to Medicare, a health care insurance benefit that you have worked and paid for during your entire working life. Here are some things you should know about enrolling in Medicare:

  • The initial enrollment begins 3 months prior to the month you turn 65 and ends 3 months after you turn 65.
  • Delaying your enrollment in Medicare, without already having existing coverage in place, can cost you a penalty.
  • The annual election period is from October 15 to December 7. This is the time to make changes for the next calendar year.
  • You can select either original Medicare or an Advantage Plan.

Once you’ve selected a plan, you should review your coverage and benefits now. Don’t wait until it is needed, or you may be in for a surprise. Keep in mind that you are more likely to use this health insurance more than any other insurance you had before. That’s why we recommend that you seek assistance from a knowledgeable health insurance specialist.

Long-Term Care

This type of care is primarily an individual responsibility as Medicare is not designed to cover your long-term care needs. When planning for your or your spouse’s long-term care, here are some questions you should consider:

  • What is your plan for long-term care?
  • Do you prefer to remain at home as long as possible?
  • Do you want your family caring for you?
  • Do you know the true costs of long-term care?
  • How will you pay for long-term care?
  • Is this a risk that you can afford to self-insure?
  • Will you spend down your retirement savings?
  • Will this jeopardize one spouse’s financial independence if the other spouse needs to pay for long-term care?
  • Are you ignoring this risk, or do you have a plan?

Risk-management planning for retirees is important and is likely different than what you faced during your career. I highly recommend that if you are retired or planning for your retirement that you meet with a qualified planner who will help you address these needs.

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