According to Fidelity’s most recent study on health care in retirement, the average 65-year-old couple can expect to spend nearly $280,000 on out-of-pocket health care costs in retirement.1 Think that estimate sounds high? Consider that you will likely have to pay for things like premiums, copays, deductibles and more.
 
Many retirees assume that Medicare will pay for most or all of their health care costs. However, that’s usually not the case. Your Medicare coverage depends on your specific options. The more robust your coverage, the higher your premiums are likely to be. And some treatments, such as long-term care and rehabilitation, aren’t covered by Medicare at all.
 
If you haven’t planned for your health care needs in retirement, now may be the time to do so. Fortunately, there are steps you can take to minimize your risk exposure and perhaps reduce your out-of-pocket costs. Below are a few tips to help you get started:

Be a proactive, informed patient.
 
They say prevention is the best medicine, and that’s certainly true in retirement. If you’re approaching retirement, now may be a good time to consult with your physician about your current health and what you can do to minimize risk. For instance, perhaps you could improve your diet or exercise routine. Maybe you should undergo that long-delayed procedure now so you won’t have to deal with it in retirement. Think about what you can do to improve your health.
 
You can also be more proactive when it comes to treatments and services. Once you’re on Medicare, don’t be afraid to ask which tests and procedures are necessary and how they relate to your symptoms. After all, you’ll likely have to pay at least something for much of your care, in the form of either copays or deductibles. Don’t hesitate to ask which services are truly necessary and which aren’t.

Review your Medicare options.

Medicare coverage is offered in a variety of different programs known as “parts.” Part A is standard for every retiree and is free. It covers hospitalizations and inpatient services. Part B covers doctor visits and outpatient care. Part D covers prescription drugs.
 
Part C is an innovative program also known as Medicare Advantage. It allows private insurers to offer coverage that includes traditional Medicare protection but also enhanced coverage. These policies may offer flexibility with deductibles or premiums and often provide protection for services not traditionally covered by Medicare, such as dental visits or eye care.
 
Take time to choose the Medicare package that best fits your needs. While you can’t predict your future health, you can make an educated decision based on your medical history. If you have a chronic condition or need regular care, robust coverage may be best for you.

Use a health savings account (HSA) to fund your out-of-pocket costs.
 
You’ll likely have some level of out-of-pocket medical expenses that you’ll need to fund with your retirement savings. However, you can use a unique tool to save for those costs on a tax-advantaged basis.
 
An HSA allows you to make tax-deductible contributions and then increase your funds on a tax-deferred basis. If you use the money for qualified health care costs, you can take tax-free distributions. That means you can start saving today to pay for your medical expenses in the future, and you can do so in a tax-favored manner.
 
Ready to plan your health care strategy? Let’s talk about it. Contact us today at DSM Financial. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.
 
​
1https://www.fidelity.com/viewpoints/personal-finance/plan-for-rising-health-care-costs
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
 
17859 – 2018/7/31

​
​If you’re approaching retirement, it’s likely that you’ll have to make a decision about filing for Social Security at some point. Social Security provides income to more than 45 million retirees and their dependents. In fact, 90 percent of those over the age of 65 rely on Social Security retirement benefits for income.1
 
Your Social Security benefit amount is based on a few factors. Your career earnings play a large role, but so too does your decision on when to file. Generally, the earlier you file, the lower the benefit amount. On the other hand, the earlier you file, the more years you will receive benefit payments.
 
There’s no universal right answer on when to file for Social Security benefits. The decision should be based on your own unique needs, goals and objectives. Below are a few guidelines to keep in mind as you decide on when to file:

Filing Early
 
You can file for benefits as early as age 62. However, any filing before your full retirement age (FRA) is considered early, and you will likely face a benefit reduction. The closer you are to your FRA when you file, the lower the reduction. For instance, if your FRA is 67 and you file at age 62, your benefit is reduced 30 percent. If you file only a year before your FRA, the benefit is reduced 6.7 percent.2
 
It’s important to remember that these reductions are permanent. If you file early, your benefit never reverts to the full amount, even when you hit your FRA. You may get increases in the future for cost-of-living adjustments, but you’ll always be below the amount you would have if you’d waited until your FRA.
 
However, that doesn’t necessarily mean filing early is always bad. If you file five years early, that means you get an additional five years of payments, albeit at a reduced amount. If you don’t live long into retirement, it could turn out that filing early was the wiser option.

Filing at Your FRA
 
Filing at your FRA allows you to get a full benefit. If you wait until the month of your FRA, your benefit amount is based entirely on your earnings and is not reduced. Most people reach their FRA between their 66th and 67th birthdays.
 
If you plan on working in retirement, it also may pay to wait until your FRA to file. After your FRA, you can earn as much as you want without seeing a reduction in your benefits. If you file before your FRA and continue working, your benefit could be reduced because of your earnings.

Filing Late
 
If you want the highest benefit possible, you may want to wait beyond your FRA to file. You can delay your filing all the way to age 70. The Social Security Administration offers an 8 percent benefit credit for every year past your FRA that you wait. For example, if your FRA is 66 and you delay your filing to age 70, you could permanently increase your benefit by 32 percent.4
 
Ready to plan your Social Security strategy? Let’s talk about it. Contact us today at DSM Financial. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.
 
1https://www.ssa.gov/news/press/factsheets/basicfact-alt.pdf
2https://www.ssa.gov/planners/retire/applying2.html
3https://www.ssa.gov/planners/retire/retirechart.html
4https://www.ssa.gov/planners/retire/delayret.html
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
The material is not intended to be legal or tax advice. The insurance agent can provide information, but not advice related to social security benefits. Clients should seek guidance from the Social Security Administration regarding their particular situation. The insurance agent may be able to identify potential retirement income gaps and may introduce insurance products, such as an annuity, as a potential solution. Social Security benefit payout rates can and will change at the sole discretion of the Social Security Administration. For more information, please consult a local Social Security Administration office, or visit www.ssa.gov
17846 – 2018/7/30

​Retirement is a time for you to kick back and enjoy life. There are many things people consider doing in their post-work years. With newfound free time, it’s easy to start spending money on costly things you never would have considered before.
 
For many retirees, it’s difficult to balance the desire to enjoy their newfound freedom with the need to stay within budget. Most retirees live on a semi-fixed income, so large cash outlays can have a substantial impact on their finances. Before making a big purchase, consider how it may affect your ability to live comfortably in later years.
 
Below are three common ways retirees spend through their savings. Think carefully before going through with any of these transactions.