Retirement’s Healthcare Options are Too Many to Weigh on Your Own

Baby Boomers overly focused on assets as they consider retirement would do well to aggressively plan for the impacts of a rapidly changing healthcare landscape. Accustomed to the relatively straightforward enrollment process of traditional healthcare plans sponsored by insurers and employers, aging workers face a puzzle of options in Medicare that can financially backfire without counsel regarding income, distributions and taxes.

Healthcare considerations only add to the maze of alphabet soup in retirement. Faced with having to understand the complexities of IRAs, 401(K)s, ERISA, RMDs, Social Security and AGI, retirees can now add to the list Medicare, Medigap, HSAs Plan B, Plan D and Cadillac plans.

By affiliating or hiring a retirement plan specialist who’s both financially and healthcare astute, consumers will better understand the various factors and the importance of planned integration. A few of the major themes include:

• Though the Affordable Care Act (Obamacare) has broadened insurability, the impacts on carriers’ profitability ultimately affects all insured, regardless of age, due to higher premiums or lower deductibles
• Medicare candidates who fail to enroll during the three months that precede or follow the month of their 65^th birthday miss open and automatic enrollment, and are subject to medical qualification thereafter.
• Medicare premiums are means-tested against two years of prior income, necessitating advance planning in order to control premiums.
• Once enrolled, participants generally realize savings from prior premiums and improved coverage
• Unused Health Savings Account (HSA) dollars can be applied to Medicare premiums
• Once in a lifetime, and subject to limits, an IRA may be able to transfer to an HSA account tax-free
• So-called Medigap, or supplemental, plans can be purchased from private insurers to partially cover expenses not covered by Medicare, but exclude long-term, dental and vision care

Accordingly, the services of a retirement planning expert accustomed to managing income, distributions, taxes and healthcare spending can significantly help retirees maximize spendable income and allocate their resources through their life expectancy.