We would all like to think that we will be healthy throughout our retirement years, but the reality is that health care challenges do enter the lives of many people, and as we all know the costs associated with medical treatment are often times extreme. Most people have health care insurance through their jobs while they’re working and they assume that when they retire they will simply be able to rely on Medicare to cover all of their health care expenses. However, when you’re planning for the future you have to have all the facts straight, so it is important to recognize some of the details about Medicare.
Many people make the logical assumption that you become eligible for Medicare at the same time you begin to receive Social Security. However, this is actually not the case. Eligibility for full Social Security benefits varies depending on the year that you were born in. People born between 1943 and 1954 reach full retirement age when they turn 66. It then rises by two months per year, so if you were born in 1955 your full retirement age is 66 years and two months. It graduates in this matter until 1960; people born in 1960 and later become eligible for full Social Security benefits when they turn 67 years of age. Medicare, on the other hand, is available to everyone regardless of when you were born when you reach the age of 65.
The thing about Medicare that many people don’t understand is that it does not cover everything, and this is something that you must keep in mind. Only Part A of Medicare comes without any out-of-pocket expenses and there are four parts. Plus, Medicare does not cover long-term care, and a stay in a nursing home can be extremely expensive. It should be noted that Medicaid does cover long-term care under some circumstances, and it is possible to qualify for Medicaid while still retaining a significant portion of your assets.
There is a lot to consider when you are preparing for retirement with regard to health care, and due to the complexities involved and the anticipated changes to the system it is a good idea to discuss this matter with an experienced retirement planning attorney.
Alan Augulis, Estate Planning Attorney
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