With most of us expected to live much longer than our parents did, it is important to look at how we intend or plan to do this.
Health is the one thing that we will all desperately need as we age, and it is vital to do some early planning to protect this asset.
Medicare and Medicaid will not cover everything, and it is important to know what they will cover and plan ahead.
Save for medical care and procedures
One way to do this is to invest in a health savings account.
These are much like personal savings accounts, but rather than having the money available for any purchases, you can only use the money in a health savings account for health care expenses.
Often, we may have good intentions of putting money away for medical expenses but prioritize other purchases.
A savings account dedicated to health care can provide you with an essential safety net that may not be covered by other health care policies.
It will also serve to cover what you need should Medicare not pay.
Why would you need extra medical savings?
You may ask, why should I put money away when I am in perfect health?
Well, the truth of the matter is that there are certain diseases and afflictions, mostly non chronic such as cataracts and dental issues, that there is a high likelihood of encountering.
Using just one of these as an example, the statistics show that by age 75, half of all Americans will have cataracts of some form and at some stage of development.
Now, professional specialist cataract surgery is not a bank breaker, but having the savings may be the difference between good eyesight and long-term blurry vision, especially if you have to wait for Medicare to pay.
If you and your family are lucky enough not to be afflicted, well, you would have been prepared, that’s why health insurance has always been there.
Yet with health savings, you can take money out for certain non-medical requirements, making it a preferred option to health insurance for many out there.
Be well informed
Before you make a final decision, you should know both the advantages and disadvantages of a health savings account.
The advantages are that you have a lot of control over how much money to put aside, how your money is spent, and what care you need.
One of the biggest advantages is that you do not pay any taxes on money in your health savings account.
Money that is not used in a particular year can also be rolled over to the next year, and if invested by the savings fund, any additional earnings are tax-free.
You must additionally be aware of the disadvantages.
It can be hard to set aside money each month, especially if you are young and healthy right now.
While you can take money out of your health savings account for non-medical purposes, you have to remember that you will pay taxes on that.
The temptation to roll over your savings and leverage tax-free earnings on investments may mean that you do not seek medical care when you really need it.
Whichever plan you choose to create your family health savings, make sure that you have researched it thoroughly.
See what others are saying and speak to your primary health care advisor to get their opinion and experiences with the savings plans you have in mind.
Be prepared, and remember, medical savings plans just make sense for your family finances.