8-Figuring Out Your Finances








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At any time of one’s life, money can be a confusing and emotional topic. When money is tight and today’s bills are piling up, preparing for retirement isn’t even on the radar. Wrapping your head around your financial future may seem daunting, but what follows are the basic building blocks. They include Social Security, health and long-term care insurance, investments in later life, and estate planning.

Social Security

Medicare covers people aged sixty-five and over, but it only covers 80 percent of your medical costs. If you don’t want to pay that amount out of pocket, be prepared to buy a supplemental or Medigap policy, which pays expenses that Medicare doesn’t cover.

Health and Long-Term Care Insurance

Medicare coverage consists of the following: Part A covers hospital care, including emergency care, home health, long-term help, and hospice; Part B covers doctor’s visits, preventive care, outpatient procedures, medical equipment, labs, and dialysis; Part C (Medicare Advantage) provides hospital and medical coverage through a managed-care plan (HMOs and PPOs), which is offered by private insurance carriers. Be sure you understand what part C covers before you sign up; Part D is a voluntary, outpatient prescription drug benefit also offered by private insurance plans.

Long-term Care Insurance

Long-term care, which is not covered by Medicare, covers a wide range of services from assistance at home with daily activities to care in a nursing home. Don’t wait until you need it to buy long-term health insurance. You’ll probably be in better health, and the cost will be lower if you buy it when you are fifty-five to sixty.

Later-Life Investment Decisions

if you are thinking about investing in your later years, put away as much money as you possibly can. If possible, fund your employer’s tax-deferred plan up to the maximum—usually 6 percent of your salary. Investing at any age is complicated unless you are an expert, so do your homework and hire an expert.

This quick overview only scratches the surface of figuring out your finances. Your best bet is to hire a financial planner to get professional advice tailored to your specific needs.