RETIREMENT

How to prepare for common medical expenses when you’re 60

December 17, 2020, 06:09 PM IST

Retirement - The golden years! This is a time when you close one chapter of your life and look ahead to beginning the next one. Much like that first day of college, the excitement is tempered with a large dose of uncertainty and stress. Some of the most significant expenses you will face post 60 years are those you will incur to maintain your health and the quality of your life. Yet with more people living well beyond 80, you will also need to make your money stretch that much longer.

Unlike other developed nations around the globe, we have no social security or long-term health care options that are created for the public. Unless you work in the public sector, even your employee insurance ceases to cover you as soon as you retire.

Even senior citizen health plans come with their own set of limitations like higher premiums, stringent medical check-ups, co-payments and waiting periods. So what can you realistically do to combat the rate of inflation, the lower monetary income of seniors and increase in expenses on things like dental procedures, eye care and periodic screenings and unexpected emergencies?

We have a few ideas on how you can prepare for these expenses during your retirement. These simple steps will help you reduce your stress and lower how much you will need to pay out of pocket for your growing healthcare needs.

Look beyond your savings to pay for your healthcare needs.

The best place to start here is to get a comprehensive health policy as early as possible. The benefits of opting in early include having more robust options to choose from, lower premiums, higher sums assured and lower demand for co-payment.

But even if you haven't thought of this by the time you are in your 30s or later, the higher premiums are still worth it considering the peace of mind you have from the protection you get. Even if you are about six to eight years from retiring, remember that your employer-provided health cover ends at retirement. You can look for specific critical illness covers and top-ups that will keep your health insurance relevant for your needs in the long term.

Some of the crucial benefits of getting comprehensive health insurance include:

- Timely reimbursement of medical expenses.

- Lump-sum payment for certain critical illnesses.

- Daily cash payments during hospitalisation

- Tax benefits.

So if you're wondering about insurance plans that can make your life easier after 60, then HDFC Life has several Health Insurance Plans that might be right for you. With easy add on and plenty of flexibility, getting coverage for critical illness expenses, surgical expenses, hospital expenses, and more is easier than you think.

Click hereto explore all your options and pick the one that's best for you.

Expand your portfolio to claim maximum tax benefits.

Another way to prepare for your senior years is to work on making your health portfolio as robust as possible while using every tool you can for more significant savings.

Health Insurance Plans - You can get an income-tax deduction up to Rs 15,000 (for those below 60) under Section 80(D) towards your health insurance premiums. If you are a senior citizen, the deduction limit sits higher at Rs 20,000. You can also get a deduction of Rs 5,000 within Rs 15,000 limit that can be claimed against preventive health check-ups.

Specific ailment treatments - When it comes to expenses for ailments like kidney failure, cancer and AIDS, you can be eligible for deduction up to Rs 40,000 under Section 80DDB. As you cross 60 years, this limit increases to Rs 65,000.

Public Provident Fund (PPF) - Investing inPPF can save up to Rs 1 lakh under Section 80C, while the proceeds you get are tax-free under Section 10 (10)D.

Monthly Income Plans - With this kind of investment plan, your proceeds are taxed as long-term capital gains which stand at 10 per cent without indexation and 20 per cent including indexation.

Calculate how much you need to save and get started.

To better understand what kind of costs you will have in the future, it's necessary to take a look at what your present scenario looks like. Once you have the data for at least three years, you can make a reasonable estimation by adding 10-15% per year to this figure.

Think about your lifestyle-related health risks, your medical history, hereditary illnesses that you are at greater risk for and even your spouse's medical needs. Take all of these into account when planning to save for the future.

Even if you do have a health policy, you will still have expenses like preventative health care, pre-/post- hospitalisation charges etc. that you might require to pay out of pocket. A buffer of between 15-20 lakhs is a perfect amount, to begin with, and then increase as you go along.

Other questions to ask yourself before you reach the age of 60 years:

- Considering your medical history and current status, is your coverage adequate?

- Does your insurance provider have a vast network that is also available in your vicinity?

- What kind of protection do you get in case of emergencies and pre-existing conditions?

While you can't turn back the clock on your life choices, there are plenty of ways you can estimate your healthcare costs and create a strategy for spending, saving and investing that can better preserve more of your retirement assets for other expenses. Log on to HDFC Life to get some of the most reliable and trustworthy financial protection you can count on for yourself and your family.

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