Budget Tips for Medicare Recipients

(3 Minute Read)

Medicare recipients can sometimes feel like their whole budget goes to insurance premiums and medical expenses. But with tips like these, individuals on a fixed income can make a budget that supports their retirement goals, encourages better wellness, and helps find more pocket money in retirement. Start using these strategies today to make the most of your income.

Comparison Shopping for Supplemental Medicare Coverage and Benefits

Once you’ve signed up for Medicare Part A and Part B, you may find you or a spouse need to purchase a “Medigap” plan, or additional coverage. These policies are sold by third party providers to cover healthcare expenses that Medicare doesn’t, like copays, treatment during foreign travel, prescriptions, and some long-term care. These monthly premiums can cost hundreds more dollars a month than basic Medicare and often lead to budget issues for retirees. Medicare has established different “parts” that individual insurers can sell coverage for, but some of these providers also offer benefits outside Medicare. Your cost for these additional Medigap plans can be affected by everything from your long-term habits and the time of year you choose to enroll, to the underwriters the insurance company chooses to work with. It’s important to consider what your out-of-pocket expenses like prescription copays and long-term care will be as compared to the monthly premiums for the insurance. Compare rates and coverage across Medigap insurers to make sure the benefit saves you money in the long run.

Save Money in Retirement with Healthier Habits

A study of food-insecure individuals, those who don’t know where their next meal is coming from, found that people of all ages who live with uncertainty about food spend an average of $1800 more a year on healthcare. A tight budget can lead some to start eating cheap fast food, but this is only a way to put off the expense until later when there’s damage to your health. Shopping for more healthy food may not seem like it will save money, but with some strategy, it can. Consider limiting your trips to the grocery to one visit a week to narrow down on impulse buying. Better yet, if you’re not used to cooking for one or two people, make a list with a friend in the same situation and split up items bought in bulk. That allows you to cash in on savings without buying extra that will just end up in the trash. Even if you end up spending the same amount on food you did before, the savings in your long-term health expenses as you lose weight and eat better will add up. The US Department of Agriculture supports a web calculator that can get you started with healthy meal planning.

Take Advantage of Discounts and Free Programs

Everyone looks forward to claiming their senior discount. From eating out at restaurants to getting online education for free, make the most of your budget once you’re old enough to qualify for these discounts based on age. Your local area Agency on Aging can likely also refer you to places to get free counseling benefits, dental care and dentures, discounted phone and Internet services for the elderly, special phones for the hearing impaired, and much more.

Make the Most of Existing Assets to Fund your Future

Lastly, it’s important to think strategically about how your current investments will support future goals. For instance, many retirees continue to live in their homes after children have moved out and the space is no longer needed. The typical home seller in 2016 was 55 years of age, and most sold their homes for 99% of the asking price. But selling a home isn’t the only strategy to grow your nest egg and reduce spending. In some cases, families may have multiples of one type of asset, like a car or a life insurance policy. In those instances, it’s often possible to sell all but one and get a cash sum in exchange. Did you know that with a life settlement, you can sell all or a portion of your policy for an amount greater than the cash surrender value? This is known as a life settlement and can provide the stability you crave. Contact Life Settlement Advisors to learn more.

Case Study:

Betty and John sold their family business last year and retired due to Johns poor health. John no longer needed the corporate owned (Term) life insurance policy and on the advice of his financial advisor, John sold his policy for $125,000.

Leo LaGrotte
Life Settlement Advisors
llagrotte@lsa-llc.com
1-888-849-0887

Download our resource, How to Plan for Healthcare Costs in Retirement, for more information on common age-related health issues, their costs, and how you can pay for the care you need.

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