Although people throughout the country and in Massachusetts view Medicare as a trusted program, it does not pay for all medical expenses that one may encounter after age 65. Services that were covered under employer-sponsored plans, such as vision, hearing and dental care are not covered. Long-term care coverage is also not covered, and Medicare has substantial deductibles and co-pays. That is why health care planning for one's retirement years is vital.
There is a maze of rules, regulations and options relevant to setting up such a plan for health care needs. Thus, it is always best to encounter such complex issues under the guidance of an experienced estate planning attorney. The long-term care planning is especially critical because the cost of staying in a nursing home is exorbitant and can easily wipe out the nest egg of an elderly couple when they least expect it.
Some people mistakenly believe that Medicare will take care of nursing home expenses, but that is not true. Some other provisions must be put in place to avert a disastrous result. In addition to the need to plan for the foregoing medical expenses not covered by Medicare, retirees must take the long-term-care factor into consideration.
One idea for preparing for the possibility of long-term care needs includes buying a long-term care insurance policy. These are known to be expensive, but they have become versatile, and shopping for quotes is at least worth the effort. One can also hold back the equity in a home in reserve to use in the event of an emergency.
Another technique for health care planning is to take out a reverse mortgage and hold the credit line in reserve. Investment accounts, such as an HSA, are also worthy of consideration. There is also a qualified longevity annuity contract that starts a lifetime income at age 80 or 85. Another important financial survival strategy in Massachusetts and throughout the country is to keep working as long as possible. This will maximize one's Social Security retirement options and provide higher payments.
Source: cbsnews.com, "How to cope with health care costs in retirement", Steve Vernon, Sept. 12, 2017