Don’t underestimate future medical expenses in retirement

One of the most common mistakes retirees make when preparing their retirement budget, is underestimating their future medical requirements. When you are fit and healthy as most new retirees these days are, it is hard to imagine that one day you might encounter some serious or ongoing health problem. However, the truth is there is a high chance you will and if you haven’t budgeted correctly, this could end up being a major burden to your overall retirement funds.

The other mistake retirees often make is overestimating Medicare benefits. After 65, Medicare and Private Health Funds do make it easier to manage medical costs but they will not cover all health related costs. If you do encounter serious health problems, the co-payments and deductibles can add up quickly. Some expensive drugs and procedures may not be covered at all.

The best way you can prepare for the future of your health is by speaking to your financial advisor about how you can best include some savings in your retirement budget plan to supplement Medicare and Private Health Funds.

When you are planning for your future health expenses, try to think beyond the short term. Consider possible long-term medical expenses as well. If at some point down the track you suffer from a debilitating illness you may no longer be capable of living alone. Consider who will look after you at this time. The best thing to do is to be financially prepared to pay for some sort of assisted care whether at a facility or home. While it might not be for a while, or ever, it is best to be prepared. You will not only ensure your retirement continues to be comfortable and free of stress but you will also be taking the burden off your loved ones at the time.

While this may not be the most enjoyable topic to be thinking about, you will almost certainly thank yourself later. The more you plan in advance for all the variables of your retirement, the more likely you are to be able to relax and enjoy your retirement knowing you are prepared for whatever is around the corner. Speak to a financial advisor about planning financially for your health expenses today.