 20sYounger people tend to have fewer medical issues, but
that doesn't mean you should ditch health insurance altogether. To
save money while making sure you're covered, consider a qualified
high-deductible plan. Also known as a catastrophic health plan, this
type of insurance typically covers costs for serious illness or
unexpected accidents. But you're responsible for minor or routine
expenses. You'll pay a lower monthly premium and a higher deductible
than with a traditional plan.
"It also comes with a powerful triple tax benefit: Not only are
contributions tax-deductible, but earnings and qualified withdrawals
are tax-free, too," says J.J. Montanaro, a certified financial
planner at USAA.
Here's another option: If you're an unmarried dependent who
doesn't have access to employer-sponsored health care, you can stay
on your parents' health plan until you turn 26.
30s
Consider broadening your coverage. You may want to supplement
your regular health insurance with accident insurance. It can help
cover emergency treatment and related expenses, such as
transportation and lodging, if you or covered family members are
injured.
While a health plan may cover much of your treatment costs, a
critical illness plan typically pays a lump-sum benefit if you're
diagnosed with a significant illness or suffer a heart attack or
stroke. It may provide extra money for things like child care and
housecleaning while you're on the mend.
"The benefits provided by accident and critical illness insurance
help take away the financial stress so you can focus on recovering,"
says Greg Galdau, USAA assistant vice president of health solutions.
Health insurance can pay some of your medical bills, but what
about the income you could lose if you become seriously sick or are
injured and can't work? That's what disability insurance is for.
Your employer may provide some coverage, but it usually isn't
portable, so consider a personal policy you can take with you if you
quit or lose your job.
Consider a flexible spending account. Your employer may offer one
of these tax-advantaged plans that let you use pretax dollars to pay
for medical expenses and dependent care, too.
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40s
While it's smart to begin saving for retirement in your 20s, most
people start to focus a little more on the specifics once their 40s
roll around.
"As you start crunching the numbers more seriously, be sure to
factor health care costs into your assumptions about your spending
needs in retirement," Galdau says.
Out-of-pocket expenses for a 65-year-old couple could suck
hundreds of thousands of dollars from a retirement nest egg,
according to the Employee Benefit Research Institute.
Start learning about long-term care insurance. If you equate
long-term care insurance with nursing home coverage, think again.
While it can cover those costs, it generally does something even
more appealing -- help give you the resources you need to stay in
your home.
50s
Stop putting off long-term care insurance. Long-term care
expenses can pose a real threat to your retirement savings and
lifestyle. This insurance can be flexible in its design. You can
typically vary the features of the policy to stay within a budget
while still reducing risk to your assets.
If you've become a caregiver for a parent or other family member,
tap into information resources such as
Care.com or those provided by the
National Alliance for
Caregiving to make your role as easy as possible.
60s
Don't go without. If you retire early and lack employer-provided
health insurance, don't be tempted to cut costs and skip insurance
until you're eligible for Medicare at 65. Consider buying an
individual policy to bridge the gap, if you have no other option. To
avoid making important decisions under pressure, learn about your
Medicare choices well before you have to make them.
[Brandpoint]
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