You'll Need More Money for Future Health Care

If you're 65 years of age or over, you might need to seriously
re-evaluate your retirement funds to see if they will cover future
health care expenses.

It's a no brainer that the costs of health care in this country are
going to continue to increase. It's inevitable. So, what that means is
even if Medicare
and Medicaid do have lower premiums when the change in programs comes
in 2010, you'll need more money to make your increased health care
costs at some point in time. Traditionally, health care costs have shot
up at twice the rate of general inflation.

While this may seem right off the wall, it actually isn't given the
current state of the economy and the rising costs of getting medical
services. If you retire this year you may need up to $378,000 in
savings just to meet the demands of your insurance premiums and
out-of-pocket expenses. Quite eye opening isn't it? By the way, this
particular figure is for a male; a female's calculation would have to
be even higher simply because they live longer. How high? As high as
$450,000. Sound like a lot? Perhaps, but health care usually represents
12% to 14% of expenses for seniors.

Salting away that kind of money might be a tad difficult to ensure
you have enough coverage for the rough spots life throws at you. You
could of course, shoot for a lower amount and take a risk that you have
a 50/50 chance of having enough funds to cover health care bills. It's
a tough decision to face when you hit 65 and think you have things
under control.

What happens if some people retire first before becoming eligible
for Medicare? Many of them think they can apply for Medicare early,
just like they applied for Social Security benefits, but that isn't the
case. What this means is that they will need more money to cover the
gap between retirement and their 65th birthday.
So really, what are the options if you want to save that kind of money
to ensure you have coverage later in life? Plan your retirement and
what kind of health care benefits you will need well in advance with a
qualified, knowledgeable insurance agent. There are so many different
options available out there, that one should suit your situation.

Make retirement plans early, be smart and save aggressively like a
squirrel storing nuts for the winter, work longer hours if you need to
for the extra money and take care of yourself to reduce the number of
problems that might crop up in later life.

Make it a point to know what Medicare covers, ask questions about
Medigap (the insurance companion to Medicare), know how Medicare Part D
works to your advantage, check out the prescription drug plan, and ask
about long-term care. Knowledge is power and that power will help you
redefine what you may need for your future health care needs.

Richard Cantu is with Medicare supplements resource, GoMedigap.com. To learn more about Medicare, Medicare supplements, or Medicare supplement insurance visit GoMedigap.com.