What Do I Do about Healthcare in Retirement? | Ask a Savant Financial Advisor
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When planning your retirement, it’s common to feel a bit lost when it comes to your healthcare coverage. After all, your health insurance has likely been provided by your employer throughout the course of your career, so now what? The good news is there are many tips and tricks to finding the right coverage for you.
Once you’re age 65 or older, you can enroll in Medicare. Experts are available to help you choose the right plan, but here’s something you may not know. If you have a health savings account, also known as an HSA, those funds can be used to pay for Medicare Part B, Part D and Medicare Advantage plan premiums, deductibles, copays, and coinsurance. (HSA funds cannot be used to pay for Medigap premiums.) So if you currently have an HSA, it may be a good idea to maximize contributions into this account in the years leading up to your retirement. You’ll save on taxes, and have a head start on funding your healthcare needs in retirement.
If you’re retiring before Medicare-age, you have other options. You may be eligible for COBRA insurance, depending on your former employer’s plan. Additionally, the Heath Insurance Marketplace provides a huge variety of private coverage options via Healthcare.Gov, all at different coverage options and price points. But here’s something you should know. The Affordable Care Act subsidies are based on your Modified Adjusted Gross Income, or MAGI. So if you make any financial moves that impact your income (like cashing in an annuity or taking an outsized distribution from your pre-tax retirement account), you may end up having to pay back those subsidies come tax filing time.
The most important thing to keep in mind is, each individual or family has different health insurance needs based on their own situation. My goal is to help clients determine the best solution at the lowest price for their individual needs. Determining the appropriate health insurance plan based on coverage, premiums, and deductibles is a core service we offer at Savant.
My name is Cory and I am a Financial Advisor with Savant Wealth Management. If you’re retiring soon and aren’t sure what to do about your health insurance needs, I encourage you to get in touch. Let’s figure this out together.
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