1. Health insurance
You’ll have Medicare in retirement, so you don’t need to worry about health insurance, right? Not exactly.
First, if you retire early, you’ll need to buy your own health care coverage for a few years. Unless you qualify because of a disability, Medicare, the national health care program for senior citizens, isn’t available until you’re 65.
Next, Medicare doesn’t mean totally free health care. Most people don’t pay a premium for Medicare Part A — that’s your hospitalization coverage — but there is a $1,364 deductible as well as some possible co-insurance costs.
Medicare Part B, which covers outpatient care, has a standard $135.50 premium and a $185 deductible, after which you pay a share of doctor, outpatient therapy and medical equipment costs. There are additional premiums and costs for Medicare Part D. That’s for your prescription drug coverage.
Finally, since there are some gaps in what original Medicare will cover, you may opt to go with a Medicare Advantage plan, also known as Medicare Part C. These plans bundle all your original Medicare services with additional coverage for things such as dental or chiropractic care. Those additional services usually come at an additional cost.
You could also buy a Medicare supplemental, or Medigap, policy to pay for some uncovered services.
For more tips, check out “How a Medicare-Covered Hospital Stay Could Cost You Thousands.”