How to Manage Health and Dental Care Costs in Retirement

One of your most significant expenses in retirement is going to be healthcare and, by extension, dental care. Even with robust insurance and financial programs in place, you may still struggle to keep up with your ongoing health needs.

What steps can you take to minimize your health and dental care costs in retirement?

Estimate Your Costs Conservatively

Healthcare will represent one of your biggest categories of spending in retirement. As you get older, your health will inevitably decline. Even if you take good care of yourself, your body and mind will naturally be more susceptible to a wide range of different conditions. Accordingly, you’ll need to attend more preventative appointments, endure more testing and evaluations, and receive the benefits of more types of care.

So how much should you be saving for healthcare costs specifically? RBC Wealth Management estimates that the lifetime cost of care for the average 65-year-old is now $404,253. Note that this doesn’t include the costs of long-term care, which can climb to more than $100,000 per year.

This figure is especially stark when you compare it to the average person’s expectations about healthcare costs. According to an RBC Wealth Management survey, people believe they’ll spend about $2,700 per year on retirement – when in reality, the average annual expenditure climbs to $5,700 per year at 65.

The problem is made even more complicated when you realize that the costs of healthcare are rising, and there are several variables responsible for this. The shortage of doctors and other healthcare providers is causing the average patient’s costs to rise, inflation is causing price increases across the board, and unfavorable dynamics between medical institutions and insurance companies are pushing prices even higher.

So what’s the solution?

You can’t entangle the complicated knot of our health care system by yourself, so the next best thing is to estimate your costs as conservatively as possible. Whatever you think you need to save for health care, save a bit more. Whatever you think you’re going to spend, plan on spending a bit more. This way, you’ll be more likely to beat your expectations and less likely to outlive your savings.

Invest in Good Insurance (and Understand Your Coverage)

With a good, strong insurance policy in place, you’ll have a much better chance of covering all your healthcare and dental expenses.

If you’re over the age of 65, you may qualify for Medicare, but Medicare isn’t perfect, and it’s important to understand exactly how Medicare works. There are many different plans available through Medicare – but none of them cover long-term care:

• Medicare Part A. This part of Medicare covers inpatient hospital stays, hospice care, skilled nursing facility care, and some other types of healthcare. If you or your spouse paid Medicare taxes over a specific period of time, you won’t have to pay a monthly premium for this.
• Medicare Part B. Outpatient care, medical supplies, preventative care, and medical insurance are covered here; the monthly premium is usually $170.10.
• Medicare Part D. Part D covers prescription drugs and recommended vaccines/shots.
• Medicare Advantage. Medicare-approved private companies offer coverage similar to Medicare Parts A, B, and D through Medicare Advantage. This is also a way to get access to vision, hearing, and dental insurance coverage.

Because Medicare doesn’t offer any long-term care insurance, and because long-term care can be so expensive, it’s a good idea to consider investing in a separate long-term care insurance policy.

No matter what your insurance policy decisions are, you can manage your expenses better with the following steps:

• Compare plans. Don’t assume that you’re currently enrolled in the best possible plan for your needs. It’s important to compare plans and choose the right policies. Shopping around can save you money and increase your coverage.
• Read the policies. Health and dental insurance policies don’t always cover what you think they’re going to cover. That’s why it’s important to read these policies from front to back so you understand how they work. For example, some dental insurance policies may cover dental implants in Denver North, while others force you to pay for dental implants out of pocket.
• Improve your understanding. Insurance policies can be complex and difficult for laypeople to understand. If there are terms you don’t understand, or if you’re confused about the wording of a specific section, reach out to your insurance agent or another representative and see if you can figure it out.

Consider Delaying Your Retirement

If you’re concerned about being able to pay for your health and dental expenses, consider delaying your retirement. If you originally planned on retiring at age 60, but you have a job that pays well, consider keeping that job and staying on for a few years. It’s not an appealing strategic move, especially if you’ve been looking forward to retirement for many years, but it could help you save up more than enough to cover all the health care expenses you’ll incur in retirement.

Utilize a Health Savings Account (HSA)

An HSA is a type of savings account that is designed to help you save money and use that money for healthcare-related expenses. On the surface, an HSA works like a 401(k) retirement plan, but there are a few important differences.

When contributing money to an HSA, the money will be withdrawn before taxes, allowing you to save more money than you otherwise would. However, you can withdraw this money at any time as long as you’re using it to pay for qualified medical expenses. These withdrawals are completely tax free, and you can allow all your contributions to grow in a tax-deferred environment.

HSAs aren’t right for each individual, but they do come with many advantages – so they’re worth considering.

Take Advantage of Free Services (and Practice Preventative Care)

Your healthcare coverage probably grants you at least some free services, such as regular checkups and screenings. It’s important to take advantage of these, since it’s much easier to practice preventative medicine than to treat a disease, condition, or problem once it spirals out of control.

For example, if you attend a regular checkup and learn that you have high cholesterol, you can immediately get on preventative medication that reduces your cholesterol before it becomes a serious problem. If you don’t attend this appointment, you may never learn that you have high cholesterol, and eventually this could result to any serious heart condition, causing you to seek far more expensive and intensive forms of treatment.

In general, preventative care is much cheaper than reactive care.

Follow Advice From Medical Professionals

In line with this, it’s important to follow all the advice you get from medical professionals. These people are invested in your health and they want to improve both your short-term and long-term outcomes. That doesn’t mean you need to agree with everything they say, but if they recommend a medication, you should take it. If they recommend significant lifestyle changes, you should try to make those changes. Doing so can help you avoid major problems – and life a healthier, more fulfilling life in the meantime.

Consider Generic Medications

In many cases, name brand prescription medications are needlessly expensive. Their generic counterparts are functionally identical in every way, but they’re much cheaper. Sometimes, switching to a generic medication can save you tons of money, especially if you take those medications on a daily basis.

Be Ready to Negotiate

At some point, you may receive a shocking medical bill – but you aren’t always responsible for paying that full amount. If your insurance doesn’t cover the healthcare services you received, you may be able to negotiate with your insurance company and help bring the bill down. If that doesn’t work, you can contact your healthcare provider directly and see if there’s anything they can do to reduce the amount you owe. If all your negotiation approaches fail, you may be able to negotiate a payment plan to make the bill easier to manage.

Take Care of Your Health

Finally, you should understand that the best way to reduce health and dental care costs in retirement may also be the simplest: take better care of your health. If you proactively take good care of your body and mind, you’ll be much less likely to experience negative health outcomes, allowing you to forgo the need to seek expensive medical and dental services.

These are some of the best strategies you can incorporate into your life:

• Eat a balanced diet. If you have a specialized nutritionist or dietitian, they may have specific recommendations for what you should eat on a daily basis. Additionally, if you have any specific health conditions that shape what you can and cannot eat, those restrictions need to become your priority. Other than that, it’s important to eat a balanced, healthy diet. You should eat a diverse array of foods, including plenty of fruits and vegetables, lean sources of protein, complex carbohydrates, and healthy fats. You should eat in moderation, potentially reducing your portion sizes to avoid overeating, and you should limit your unhealthy indulgences, such as desserts and fast foods. This simple step can help you maintain a healthy weight, ensure adequate intake of necessary vitamins and minerals, and ultimately help you feel better.
• Stay hydrated. Adequate hydration is important for improving your body’s performance; it can also help you stay in a better mood. Try to drink water throughout the day, even if you don’t feel particularly thirsty.
• Quit smoking and drinking. Drinking and smoking are vices that can be hard to break, especially if you’ve participated in these habits for many years or decades. But you should know that these take a massive toll on your health, especially if you drink or smoke excessively. If you want to reduce your health care expenses to the absolute minimum, you should quit smoking and drinking altogether. If that’s not a possibility for you, at least consider reducing the amount you smoke and drink.
• Exercise every day. Physical exercise is one of the best ways to stay healthy. You’ll keep your body in shape, burn calories, improve your muscular health, improve your bone health, and keep your mind active at the same time. You don’t need to be a marathon runner or a powerlifter to exercise every day; even walking around your neighborhood can be a stimulating form of exercise, assuming you’re walking vigorously. If you’re not currently in shape, or if exercise is a struggle for you, take baby steps to increase your physical fitness and consult your doctor for further advice.
• Practice good hygiene. Good hygiene can also improve your health, especially when it comes to oral care. Bathing regularly, brushing and flossing your teeth, and keeping your home clean can all lead to more positive health outcomes.
• Take your medications. This should go without saying, but you’d be surprised to see how many people failed to take their medications on a regular basis. Follow your doctor’s orders and take the medications they prescribe to you.
• Stay social. Don’t underestimate the impact that socialization can have on your health. If you have a thriving social life, with many friends and family members, you’ll see much better health outcomes than counterparts who remain isolated. Go out of your way to stay in contact with the people you love the most, and if you don’t have many strong connections in your life, consider making new ones by joining a group or starting a new activity.
• Recognize your limitations. As you get older, it’s important to recognize some of your limitations and avoid overstraining yourself. Taking unnecessary risks or straining your body too hard can end up hurting you.

The sooner you start following these practices, the better.

No matter when you plan on retiring, healthcare costs are going to be a burden for you. The more time you spend planning for your health and dental care, the better equipped you’ll be to manage expenses and continue thriving in your retirement.