For many people, the goal of working for years is to be able to retire comfortably in the destination of their choice. That may often mean retiring in a foreign country. These expat retirees want to enjoy all that life has to offer in their golden years. But in order to reap these rewards there is much important preparation you must do financially. You must make smart financial planning decisions that might include investing in 401ks, IRAs, or the stock market. You may need to make some sacrifices such as not taking vacations, or saving a bit extra from each paycheck. But one area which is especially important in preparing for and living a retiree expat lifestyle is to have sufficient health insurance. Having health insurance for expat retirees can make the difference between the comfortable life you have always dreamt of or experiencing a nightmare.
It is no secret that the cost of healthcare if you are uninsured can be astronomically high. From doctor’s visits to medical procedures to medication, each and every step in the healthcare process comes with a significant cost that you will need insurance to offset.
You can use handy healthcare cost calculators like this one, but just to give you a sense of the cost involved in the average retiree’s medical care, Barron’s estimates that a retired couple with Medicare coverage will spend $265,000 on medical treatment and care from age 65 onward.
Keep in mind that figure INCLUDES Medicare coverage, so you can imagine how much harder the hit becomes if you do not have Medicare. And the same articles suggests that if you earn more money (in this case $214,000-$267,000) which means you get less Medicare coverage, that $265,000 estimate skyrockets to $565,142.
Are you prepared to pay that much for medical care? Probably not, but obviously you cannot afford to simply not get treatment. Everyone knows that as you age, medical needs increase greatly, ranging from simply needing more routine checkups and examinations to daily medication to costly surgeries. But while everyone knows these costs go up, few people truly think about by what magnitude they increase, and as such they are ill-prepared for the reality of what it might cost to support their retiree years without proper health insurance coverage.
What are some things you can do to help position yourself well for your retirement years?
For one, it is important to realize that if you are living abroad, your Medicare coverage will not help you outside the United States. You would need to travel back to the U.S. in order to take advantage of that policy.
But a Medigap policy could be just what you are looking for. With a Medigap policy, you can enjoy many of the same benefits you would enjoy with your Medicare policy. Some Medigap policies contain levels of coverage for foreign travel, so that is one way to stay covered while staying abroad.
Another good way to save money is with Health Savings Accounts. If you are not familiar with Health Savings Accounts, the idea is actually quite simple. These are special accounts in which you can deposit money tax-free and that money is earmarked for use in medical situations. Your interest and earnings within the Health Savings Account, or HSA, are exempt from tax, which is certainly a wonderful benefit. So while you cannot avoid medical expenses, an HSA provides a smarter and more economically-friendly way to pay them.
Another helpful tip for expat retirees is that when you are choosing which country to move to, be careful to select one that offers universal health care to all of its citizens. Bankrate cites countries such as Spain, Argentina, New Zealand, and Japan, among others, as countries which offer universal health care options. If you can become a citizen of one of these countries, then you can take advantage of their inclusive healthcare offerings.
Finally, you should also consider a health insurance plan designed especially for expat retirees. There are many plans and policies that allow you to enjoy coverage beyond what might be offered by Medicare or Medigap. While these may have high deductibles or other charges, the cost of having that insurance might pale in comparison to what it costs to have surgery or pay for several expensive medications that require constant refilling at the pharmacy.
You are not alone if retiring abroad is on your to-do list. But make sure that on the long list of preparatory steps you engage in includes reviewing health insurance options and selecting the right one for your situation.
