Baby Boomers have changed the world in many ways. According to the 2014 US Census there are 76.4 million baby boomers and they are making a steady march towards retirement. Retirement for a baby boomer will look very different than previous generations. For example, they are estimated to live longer than any previous generation and consume far more healthcare dollars than ever before. One of the largest challenges for baby boomers is how much money to set aside in retirement for healthcare. There is an inherent fear that they may outlive their retirement savings. A 2014 Fidelity study found that the average couple retiring at age 65 will spend roughly $220,000 in healthcare costs like doctors, insurance, and drugs; but that doesn’t include anything for long term care services.
So, if you are a baby boomer preparing for retirement, what should you consider? Here are 3 things baby boomers should consider when planning for healthcare in retirement:
- Look into Long Term Care Insurance. Long Term Care insurance is like retirement disability. If you are not able to care for yourself due to aging or a medical condition, the insurance pays for a professional to come and help. It can cover simple things like cleaning, cooking, and helping with errands, to very skilled nursing care. By using insurance instead of your retirement savings, it helps insure you do not live beyond your savings and protects your kids from having to provide care.
- Work with an insurance specialist. Would you hire a roofer to wire your house? Probably not. Just like contractors, you will get better advice and lower costs by working with an insurance specialist in specific areas like Medicare Supplements, Long Term Care, and Annuities. Make sure you find a specialist who works primarily in that product line and represents many companies. They can work on your behalf to get you the best deal so you don’t have to do all the work.
- Start early. Baby Boomers never think they will get old, sick or hurt. But unfortunately, it still happens to everyone, eventually. By starting early in your mid to late 50’s by setting up your team of specialists or getting educated on products like long term care, you will be more likely to have the coverage you need at the time you need it. Just like you can’t buy home owners insurance AFTER your house is on fire, it is best to plan ahead and have the insurance in place BEFORE you need it.
Baby Boomers changed everything from music, television, to the internet. They will also change the way retirement healthcare looks and by planning ahead and following these simple steps, they will be ready to shake up the establishment in their later years as well.
LTC Consumer is an independent, free online service to help consumers understand what long term care insurance is, how it works, and how to evaluate coverage options. Our mission is to provide an educational, no-pressure resource for learning about long term care planning, with the opportunity to speak with specialists who can help them.