What happens if I have unexpected expenses, such as health care or long-term care needs?

Retirement plans should factor in unexpected expenses, such as health care and long-term care needs, as they can have a significant impact on a person's ability to achieve their retirement goals. Many retirees are caught off guard by the high costs associated with these types of expenses, and it can quickly deplete their retirement savings if they are not prepared.

Here are three examples of how unexpected expenses can be dealt with in a retirement plan:

  1. Health care costs: Health care costs, including insurance premiums, deductibles, and out-of-pocket expenses, can be a significant expense for retirees. A FEE-ONLY financial adviser may recommend that clients purchase a comprehensive health insurance plan, such as a Medicare Advantage plan or Medigap policy, to help cover these costs. Additionally, the adviser may recommend setting aside money in a health savings account (HSA) to pay for out-of-pocket expenses.

  2. Long-term care: Long-term care can be an unexpected expense that retirees may face. A FEE-ONLY financial adviser may recommend purchasing long-term care insurance to help cover the costs associated with long-term care. This type of insurance can provide coverage for services such as nursing homes, assisted living facilities, and in-home care.

  3. Disability Insurance: Disability insurance can provide financial protection for individuals who are unable to work due to an illness or injury. A FEE-ONLY financial adviser may recommend purchasing disability insurance to help cover the costs of living expenses, such as mortgage payments and medical bills, if you are unable to work.

If you don't have sufficient insurance coverage, unexpected expenses such as health care or long-term care can quickly deplete retirement savings. Without insurance, retirees may have to rely on their savings or retirement income to pay for these expenses, which can leave them with little money for other expenses or to last throughout their retirement. With insurance, these unexpected expenses can be covered, and the retirees' savings can be protected, allowing them to maintain their standard of living during their retirement. 



About This Article

The information provided in this article serves as educational material and should not be construed as financial, tax, or legal advice. This content is brought to you by RetirementPlanAdviser.com, a website operated by The Independent Adviser Corporation. With a history dating back to 1998, it has supported countless individuals, families, and businesses by offering access to educational resources and a network of experienced Fee-Only financial advisers, accountants, and attorneys. Free consultations are always available. Schedule your consultation today at RetirementPlanAdviser.com or explore the only toll-free directory of Fee-Only professionals at 1800Adviser.com, the only toll-free platform of its kind. For more details, see its Privacy Policy and Terms of Use, Legal Notice and Disclaimers.