Retirement is supposed to be a time to relax, worry less, and enjoy a slower pace of life. Most folks I work with and meet prefer to retire before age 65. For most retirees, leaving full-time employment means leaving employer-provided health care coverage behind. If you retire before age 65 you can't take advantage of Medicare immediately, thus forcing you to fund your own health insurance until you are eligible for Medicare benefits.

Be sure to take advantage of all possible health care funding sources. If your employer offers a health savings account (HSA) with a high-deductible plan, you may make pre-tax contributions to be used at a later date for medical expenses. I am not na?ve enough to believe that everyone can bridge the gap to Medicare through HSA plans alone. It is likely those who retire before age 65 will be forced to seek their own health care providers. The most effective way of reducing health care costs in retirement is to be informed and proactive about choosing your care provider. Do not wait until the last moment and be forced to make a decision without exploring all of your potential options.

The Medicare health insurance program is the primary source for health coverage for American retirees. Most folks will qualify for basic hospital insurance, known as Part A at age 65. If you and your spouse paid Medicare taxes during your working years, this coverage is free of charge. Unlike Part A, Medicare medical insurance, known as Part B, is funded by paying a monthly premium. Part B covers ambulance services, clinical research, outpatient hospital care and some additional services. These two plans can be bundled into one called the Medicare Advantage plan. The Advantage plans offer Part A, Part B, and supplemental coverage in a single policy.

As life expectancies increase and people are in retirement for longer periods of time, the money set aside to cover health care costs will have to last longer as well. Please take the time to consider all of your health care options. Being informed and proactive about your decisions will allow you to relax during your retirement and ultimately sleep better at night.

Ethan Wade, Financial Advisor


(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).