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STORM SEASON
Important Note:

June through November our agency may become prohibited from binding coverage should a “Tropical Disturbance” enter the Gulf of Mexico or Caribbean Sea.

In these cases we may be unable to bind new coverage quoted in open proposals until the storm leaves our area and our binding authority has been restored.

Please arrange your coverage protection early to avoid this type of delay. While we regret any inconvenience, the carriers impose these restrictions on all agencies.

Taming Retirement Healthcare Costs

Our retirement years are supposed to be the best years of our lives, a time when we can slow down, relax and enjoy everything we’ve worked so hard to achieve. Unfortunately, large expenses can quickly tarnish what we believed to be golden—if we’re unprepared for them. For example, according to Fidelity Investments, a couple retiring this year will need $220,000 in today’s dollars just to cover the cost of their post-retirement healthcare needs.

While that figure is unchanged from last year, factoring potential healthcare expenses into your retirement plan is critical. Fortunately, there are steps you can take to tame those costs.

Get to know your health insurance options.

If you want to control your healthcare expenditures, you need to understand your health insurance options once you retire. Few of today’s firms offer their previous employees retirement healthcare coverage—so you’ll likely need to strike out on your own. This means the government’s Medicare health insurance program will probably be your primary source of coverage. In most cases, you’ll qualify for basic Medicare hospital insurance (also known as Part A), once you turn 65. Provided you paid Medicare taxes while working, Part A won’t cost you a dime.

Part B (also known as Medicare medical insurance) covers doctors’ services, outpatient hospital care, and is not free. You’ll pay a monthly premium for Part B—and there’s no annual limit on your out-of-pocket expenses. You can also choose a Medicare Advantage plan that combines Part A, Part B and additional supplemental coverage into a single healthcare policy. Privately managed, these plans often offer lower premiums or better benefits, though you may be required to use in-network providers.

Then you have to consider your prescription drugs. Retirees typically use a lot of them, and spending for prescriptions has increased 114 percent from 2000 to 2010 according to Fidelity Investments. You can purchase Medicare Part D for prescription drug coverage as a supplement to Part A and Part B or as part of a Medicare Advantage Plan.

Consider early or delayed retirement carefully.

Couples retiring at 62, before they become eligible for Medicare, spend an extra $17,000 per year on healthcare for a total of $271,000 during retirement. According to Fidelity Investments, the extra costs include health insurance premiums for the period prior to Medicare enrollment as well as estimated out-of-pocket costs during that time.

Delaying retirement, on the other hand, can save you money. Fidelity Investments found that couples who postpone retirement until the age of 67 can save about $10,000 per year. This reduces their estimated healthcare costs in retirement to $200,000.

Open a health savings account before you retire.

If your employer has adopted a high-deductible health plan (HDHP), you are eligible to open a health savings account (HSA). An HSA will allow you to pay for qualified medical expenses with pre-tax dollars. While many people utilize their HSA to pay for current expenses, you don’t need to use the money right away. You can actually save your HSA contributions and use them to pay for qualified medical expenses in retirement. Any withdrawals for that purpose are also federal tax-free.

Have you included possible future healthcare costs in your retirement plan? To discuss how much you may need and learn more about controlling post-retirement healthcare expenses, contact your financial planner or advisor today.