As we grow older, planning and setting aside money for healthcare expenses become increasingly important. In fact, individuals who are 65 and over typically spend almost 10% of their annual income on healthcare. This is a significant portion of their income and something that should be considered when planning for retirement.
AARP reports that 10% of Medicare beneficiaries spend more than half of their income on healthcare expenses. While Medicare can help cover some of these costs, it does not cover everything. For example, Medicare does not begin paying until after the $1600 deductible amount for 2023 is met, which applies to each benefit period.
Dealing with benefit periods, deductible amounts, coinsurance, and other details can be complicated. Therefore, I recommend keeping it as simple as possible.
Another important factor to consider is how you will receive your Medicare benefits. You can choose between original Medicare and Medicare Advantage plans. Although Advantage plans may seem cheaper, they can end up being more expensive in the long run since insurance companies are constantly seeking ways to reduce costs at the expense of their clients.
It’s essential to seek qualified advice when considering Medicare benefits to ensure that you make informed decisions that will best suit your individual needs.