You can use a health savings account (HSA) established while working to pay for premiums, deductibles, copays, and other medical expenses once you retire. If you have not enrolled in Medicare, continue contributing to your HSA. The pretax money you put in is tax-free, even if the fund's value has increased. If your HSA funds are invested in equities, consider switching to a money market fund after you retire to reduce your financial risk.
Fremont, CA: Health care may become one of your most significant monthly costs during retirement. Most consumers do not have to pay any Medicare Part A hospital premiums. However, you must pay a premium for Part B medical services, fees for Part D prescription coverage and, if applicable, Medigap insurance. If you have an Advantage plan, you may have to pay a premium for both that and Part B. You'll also need to budget for deductibles and copayments.
Many Medicare Advantage plans charge minimal or no premiums. However, your choice of physicians and hospitals is frequently limited. You can have a large deductible and a lot of copays. Your out-of-pocket expenditure limit might be as high as $8,300 for in-network treatments and $12,450 for out-of-network. So, do your research. If you see a lot of specialists or know you'll require surgery, calculate how much the plan will truly cost you.
If you choose conventional Medicare, remember it will not pay 20% of Part B expenditures. A Medigap, or supplementary, insurance plan will need a monthly fee. (The cost will vary depending on whatever plan you choose.) However, you may not have any deductibles beyond Part B's yearly $226. In addition, you will likely have reduced (or no) out-of-pocket expenditures than with an Advantage Plan.
