Tim Wood, CFF
Safe Money Retirement
The Three Pillars of a Safe-Money Retirement
Everyone wants a stress-free retirement, but so many retirees are constantly worried about their financial wellbeing. How do you overcome the stress of establishing a safe retirement plan?Many are concerned about having the right medical coverage and whether they can afford the monthly premiums or the huge bills which often follow a hospital stay. Others are concerned about losing everything if they were to get into a long-term care situation because they’ve seen friends and family members completely drain their savings very quickly. Some are concerned about their final expenses or leaving their loved ones in a bad place if something happened to them. And the #1 stressor by far is worrying about having enough money to pay the bills every month now and whether they will outlive their retirement savings.So what can be done to overcome all this fear and worry? There are three pillars of a safe-money retirement plan. First is life insurance, to ensure your family is protected and secure once you’re gone. Next is a safe-money retirement plan that can protect your retirement savings from losses and generate an income you can’t outlive. And finally, proper Medicare coverage, ensuring your medical expenses are taken care of throughout retirement. Let’s start with your medical and drug coverage with Medicare. I often get the question, what’s the difference between a Medicare Advantage plan and a Medicare Supplement plan from those about to turn 65. Still, many people who are already using Medicare don’t fully understand the differences, so let's dive in and make sense of it. Original Medicare consists of Part A, your hospital coverage, and Part B, your doctor coverage. If you’ve worked in this country for at least ten years, then Part A has no premium at all; you’ve paid it through taxes throughout the years. Part B has a small monthly premium typically taken out of your social security payments each month. For 2021 this amount is $148.50 per month. You could qualify to get all or a portion of that back, depending on your financial situation. There are three main issues with original Medicare:
- There are no out-of-pocket maximums at all, which means you could get enormous bills if and when something significant happens.
- There are sometimes large co-pays and coverage gaps that can add up to even more huge bills.
- There is no drug coverage at all.
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