With longer life expectancy, the cost of health care has increased. It has been estimated that people over the age of 60 pay the most when it comes to health care. Due to the economic turmoil and rising costs, it has become more important than ever to plan for additional expenses that old age requires. It is not as difficult or as scary as it seems. With a few changes to lifestyle and some prudent investments, anyone can be prepared to meet the cost of growing old.
Though it is good to have Medicare, it does not cover expenses considered non-medical in nature. For example, if you need help with daily activities such as bathing or dressing or cooking, Medicare will not cover the costs. For nursing home costs, assisted living and independent living, Long Term Care Insurance is what you need. It is best to get this policy as soon as possible because the older one gets, the more premium one pays for it. Buying the policy as a young person means you pay lesser premium for a longer time. Nowadays, there are many insurance companies and employers who offer this policy at a group rate that is slightly cheaper. If and when you do buy a Long Term Care Insurance policy, make sure that the premium won”t go above a certain amount and that the benefits are protected against inflation. Also try and find one that covers home as well as nursing home care.
Apart from Medicare or Long Term Care Insurance, it is always advisable to have supplementary health insurance. If you are working and your retirement benefits include health care, this can be your second fall back solution. There are many different types of Medicare supplemental policies. They have different premiums and different coverage. Some pay for medication while others don”t. Choose the one that suits you the best.
A lot of money can be saved on medication by buying generic drugs. If certain medications are taken regularly, you can save money by ordering them through a mail order drug program. You could also choose to order drugs from pharmacies in Canada.
Children who pay for their parents care, especially medical care, are eligible for tax deductions. If the unreimbursed medical care expenses are above 7.5% of the adjusted gross income of the adult child, then these expenses are tax-deductible. If more than one child pays for the parent”s care, the deduction can be taken advantage of, if all the expenses are added up and attributed to one child. Also, a parent can be declared a dependent if he/she earns less than $3200 per annum in taxable income. With this declaration there is a deduction in tax as well.
A reverse mortgage is something a lot of elderly people are looking at as an alternative way of subsidising costs after retirement. As the name suggests, with a reverse mortgage, you get a loan from the bank with your house as mortgage. But instead of paying the bank, the bank sends you a monthly check. The loan becomes due only at the time of your death or when you sell your house. You have to be 62 years old and own a house to be eligible for a reverse mortgage. The older you are, the more money you get. In the 1980″s, reverse mortgages were not very popular because of low rates. But now, with new variable interest rates, this is an option worth considering.