Four in 10 Americans retire sooner than they expected; of those, 40% do so because of health issues or
disability, according to the Employee Benefits Research Institute.

A couple, both age 65, retiring today will spend, according to Fidelity Investments, approximately
$200,000 on health care during their retirement years – and that doesn’t include any assisted living or
nursing care. As employers continue to curb pension plans and health care coverage for retirees,
individuals will shoulder a heavier financial burden for medical services.

Thanks to medical advances, many conditions once considered life
threatening can be treated but may result in some level of permanent disability.
A disability can increase your health care expenses in retirement beyond what
you had planned for and prevent you from earning additional income to cover
those expenses. Social Security may provide some disability benefits, but
disability insurance, often considered a tool for the earning years, may have
a place in your retirement risk management plan.

If you’ve already been diagnosed with a chronic condition – diabetes, heart
disease, high blood pressure, osteoporosis – or suffered a disability,
adjustments to your retirement savings and distribution estimates may be
needed. If you are already retired, you will need to check your budget and
income structure to ensure enough available funds for related costs.

Don’t count on your employer to continue health care coverage for you after
you retire. Only 30 percent of workers, most of them in government positions,
still get health insurance benefits in retirement. Among private-sector
employees, only 13 percent have access to employer-sponsored health
insurance in their retirement. Some employers will allow retirees to stay on
their health care insurance as long as the retiree pays the full premium.

Most early retirees will need to secure private insurance to bridge the gap
between employer plans and Medicare, which doesn’t start until you’re 65.
The Consolidated Omnibus Budget Reconciliation Act, or COBRA, allows you
to keep group coverage for 18 months but you will pay the full premium. When
you’re time’s up, if you’re not yet 65, you’ll need to find private coverage.

Regardless of your health, it’s important to maintain continuous coverage. A
lapse in coverage could make you uninsurable if you have a health crisis
between policies. When you end coverage with one insurer, be sure to get a
certificate of insurance to document that you had been insured before. Having
that document can make it easier to get coverage, particularly if you have a
condition that existed while you were still insured.

If you’re still working, you may want to consider funding a Health Savings Account (HSA). Anyone
younger than 65 can open an HSA after purchasing a qualified high-deductible health insurance plan.
Unlike the flexible spending accounts some employers offer with group insurance, HSA contributions and
gains can be rolled from year to year – there’s no “use it or lose it” requirement – and you retain
ownership of the funds even if you terminate employment. Because of the age limit, you should look at an
HSA option far in advance of your retirement.

Taking care of yourself can make a big difference in prolonging your working years until you choose to
retire and keeping health care costs at bay during retirement years. It’s never too late to start taking care
of your mind and body by eating right, exercising and getting regular checkups. As a bonus, you’ll get
more enjoyment out of your retirement years!

This article was submitted by Robert Valentine of Financial and Retirement Management.Robert Valentine is a well-known expert in the matters concerning investors. His articles on financial planning matters that concern investors have been published by several publications throughout the United States.