Though retirement should be an exciting period of life in theory, for plenty of seniors, it's a stressful one in practice. That's because many retirees are caught off-guard by the expenses they inevitably face. And if there's one expense that's more likely than not to go up in retirement, it's healthcare. In fact, senior medical care can be so onerous that in a recent study by Voya Financial, workers listed it as their single most worrisome expense.
If you're concerned about healthcare in retirement, you're clearly in good company. But you should know that there are steps you can take to ease the burden and take some of the financial pressure off. Here are just a few.
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1. Sign up for Medicare on time
Though Medicare Part A, which covers hospital visits, is generally free for enrollees, Part B, which covers doctor visits and diagnostics, comes at a premium. But you can do your part to keep that premium to a minimum by enrolling in a timely fashion.
Your initial Medicare enrollment window kicks off three months before the month of your 65th birthday and ends three months after the month of your 65th birthday. All told, you have seven months to sign up for Medicare coverage without incurring a penalty. But if you wait too long to enroll, you could see your premiums rise by 10% for every 12-month period during which you were eligible for coverage but didn't sign up.
Now there is an exception to this rule. If you're still covered by a group health plan through an employer (either yours or your spouse's) by the time your initial Medicare enrollment window rolls around, you can hold off on signing up without having to worry about that Part B penalty. Rather, you'll get a special eight-month enrollment period that begins the month after you separate from your employer or the month after your group coverage ends -- whichever comes first.
Either way, figure out when you're supposed to sign up for Medicare. This way, you'll have coverage when you need it and avoid penalties that add to your costs throughout retirement.
2. Review your drug plan year after year
When you sign up for Medicare, you'll also need a Part D plan to cover prescriptions. You'll obviously want to research the right plan initially for optimal coverage, but don't settle on a single plan and stick with it for the long haul. Plan formularies tend to change from year to year so that you might get great coverage for the medications you take at one point, and then get lousy coverage at another. Furthermore, as you age, your prescription needs are likely to change, so plan on reassessing annually to get the best coverage at the lowest cost.