How can I prepare for medical or long-term care?
Edward Jones - Chad Choate, AAMS
Mar 24, 2021
Florida - Sarasota, Bradenton & Charlotte Counties
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We can help you do just that so you can make the decisions that are right for you. In general, youll have two types of medical expenses when you retire: traditional and long-term.
Traditional medical expenses
Medicare is designed to cover traditional expenses, such as doctors visits, prescriptions, in-hospital expenses and wellness exams. However, you'll still need to budget $4,000 to $6,000 a year to cover out-of-pocket costs Medicare doesn't pick up including premiums and deductibles as well as any supplemental insurance.
Below is a quick overview of Medicare Parts A and B costs and coverage.
Standard Medical Components
*Source: Medicare, Kaiser Family Foundation, Edward Jones estimates.
Medicare doesn't cover most long-term care costs
Of all the expenses Medicare doesn't cover, long-term care is potentially the biggest. This type of care includes nursing homes, assisted living, in-home health care and adult day care. Costs vary according to the type and amount of care, but the price tag can add up: Using an average nursing home stay of 2.5 years, you'd need more than $200,000 in todays dollars to cover this cost and that doesn't include the effects of inflation.
You can pay for long-term care by adding these costs to your budget or insuring against them. If you decide to pay for them out of pocket, your Edward Jones financial advisor can look at your entire financial picture and help you determine if your portfolio can withstand this potential cost.
Another option is to purchase some form of long-term care insurance. The policies and costs can vary dramatically, however, based on your age, health and gender, as well as the amount of coverage you desire.
Your Edward Jones financial advisor can help you evaluate the following:
Amount of coverage
Look for a policy that offers the highest amount of long-term care coverage relative to other options, assuming the same premium.
Potential for rising premiums
Insurance companies can raise their premiums even after you've purchased a policy. Make sure you read the fine print. Your Edward Jones financial advisor will work with you to make sure you understand all of this.
Benefit of insurance vs. the risk of not needing it
As with any insurance policy, there's always the possibility that you'll pay for coverage you'll never use. But given the large potential costs of a long-term care stay, its important to weigh the cost of insurance with the risk of needing care and not having coverage to pay for it.
Health care costs are important, but they are also just one of many factors to consider when you look at your retirement picture. That's where your Edward Jones financial advisor comes in. By getting to know you and your whole financial picture, he or she can work with you on a personalized strategy to fit your needs.
Written & Submitted By: Edward Jones- click for more information*
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