Health care during retirement – although it’s expected, we often underestimate the expense. Furthermore, as we age we’ll likely require more health care, the cost of which is continually on the rise. As of 2010, according to the U.S. Bureau of Labor Statistics’ Consumer Expenditure Survey, 2010, a person age 65 and over can expect healthcare to be about 13% of their annual spending.
Fortunately, according to the Employee Benefit Research Institute, Medicare can pay for over half of health care expenses if a person plans well. To maximize Medicare benefits, it’s important to understand the options to make informed choices — but any plan should include a decision on how to pay for out-of-pocket health care costs during retirement.
Although eligibility for Medicare occurs at 65 years of age, it’s recommended that enrollees sign up three months prior to their 65th birthday to avoid delaying coverage. They’re still eligible to sign up three months after their birthday, but additional delays are likely.
An enrollee doesn’t have to be retired or collecting Social Security to receive Medicare benefits. If they or their spouse still work and have insurance through an employer, they should contact their benefits administrator to find out how their insurance works with Medicare.
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