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We all know that health insurance can cost a lot. In 2022, the average American who received coverage through their employer paid more than $6,100 for a family plan — or about $500 per month. That’s nearly 10% of the typical household budget.

But there are also many expenses outside of premiums to contend with, including copays, deductibles, medications and medical devices. Here are 10 strategies to save on out-of-pocket medical costs.

1. Health Savings Account (HSA). HSAs are available to employees with a high-deductible health plan (HDHP). They let you set aside pre-tax dollars to cover certain qualified health care costs. In 2022, the minimum deductible for an HDHP was $1,400 for an individual and $2,800 for a family, and you could contribute up to $3,650 for individual coverage and up to $7,300 for family coverage. The money invested in an HSA is tax deductible, and it can grow and be withdrawn for qualified medical expenses tax free, giving it a triple tax advantage.

2. Flexible Spending Account (FSA). FSA funds can be used to pay for qualified medical expenses, such as health plan deductibles, copayments, prescriptions and medical devices. Your employer sets the limit on deposits, and this money isn’t taxed. You may be allowed to roll over up to $500 of whatever you don’t spend from one year into the next, or your employer may allow up to 2.5 additional months to use up those funds. See your human resources department for more information.

3. Pharmacy discount programs. Pharmacy discount programs offered by major chains as well as independent companies operate outside your insurance plan and can help save you money on prescriptions. Discounts may vary, so research a number of different programs.

4. Urgent care. Some facilities that look like urgent care clinics are actually associated with hospitals and bill at much higher “emergency room rates.” So it’s important to understand which type of facility you visit.

5. Generic medications. Once a drug manufacturer’s patent lapses, other companies can make it in a less expensive but chemically equivalent generic form. Ask your doctor how much a prescribed medicine will cost and if a generic would be appropriate.

6. Free health services. Many free preventive and wellness benefits, as well as maternity and newborn care, are provided under the Affordable Care Act (some restrictions may apply, contact your health plan provider for more information). Take advantage of those you qualify for.

7. Shop around. We routinely shop around for a new phone or TV, yet often fail to do so when it comes to our medications, provider services and medical procedures. Hospitals are now required to publish prices for many services, which makes comparison shopping easier. Shop the cost of nonemergency procedures to see where you can save, but also research your providers’ health and safety outcomes.

8. Time your procedures. Health plan deductibles renew yearly. Be mindful of the calendar and get nonemergency procedures scheduled before your deductible rolls over each year.

9. Hire a medical billing advocate. If you have a serious medical condition, consider hiring a medical billing advocate to review bills to look for errors that can cost you money. They can challenge any discrepancies and negotiate with health care providers on your behalf.

10. Protect your health. One of the best ways to save on health care is to do what you can to keep yourself healthy. Stay up to date on screenings and recommended vaccinations, don’t smoke or drink excessively, maintain a healthy weight, stay active and manage stress.

Medical bills can be overwhelming and threaten your financial wellness, but armed with information and smart strategies, you can fight back.

Sources

https://www.usatoday.com/story/news/health/2022/10/29/health-insurance-cost-not-yet-hit-inflation-could-soon-spike/10620266002/

https://www.healthcare.gov/glossary/health-savings-account-hsa/

https://www.fool.com/the-ascent/research/average-monthly-expenses/

https://www.healthcare.gov/glossary/flexible-spending-account-fsa/

https://www.consumerreports.org/cro/2012/04/discount-drug-programs-can-save-you-money/index.htm

Many people dream of relocating when they retire. While some spots are more popular for retirees, these areas often come with higher costs of living. And because most retirees live on a fixed income, it’s important to keep a close eye on costs. If you’re dead set on retiring to a pricier area, you may even need to continue working for a few years longer than you planned to make it happen. Here are things to consider when evaluating your options.

Taxes

From state to state, and even from town to town, the baseline taxes that residents must pay can vary quite a bit. Some states, such as Florida, have no state-level income tax at all. Others have either a flat tax rate — where the state taxes all income at the same rate — or a progressive tax — in which those with higher incomes pay a higher rate. But even if your state has no income tax, your town’s property taxes may cut into your savings. It’s also important to assess the sales tax rates in the area where you’re hoping to move, as these could also add up. Some municipalities have local sales taxes as well, so be sure to do your research to determine if an area is truly affordable for your retirement budget.

Housing Costs

Home prices and rental rates have increased steadily for years, but this is especially true in places with competitive real estate markets. It may be helpful to research future development plans in your area. If a large company is planning to build or expand a major facility nearby in a few years, for example, expect housing costs to increase as new employees want to move closer to their jobs.

Insurance

Many of the most popular retirement destinations — particularly along the coast — are also in areas that are at particular risk of certain disasters. For instance, Florida’s hurricane season lasts for several months every year, and residents sometimes face catastrophic storm damage. Because of this, currently the average cost to insure a $250,000 home in Florida is $1,648 per year, compared to $681 per year in Delaware. Your car insurance may be higher in certain states, too, which often depends on the average number of uninsured drivers in the area and other factors.

Transportation

Unless you enjoy (and can afford) frequent travel, it’s important to think about the proximity to the places you’ll want or need to go often. Being far away from loved ones could require you to spend a lot of your retirement income on visits, and if you’re an outdoorsy person, living in a city means you’ll be planning — and paying for — frequent getaways. But it’s not just leisure that could cost you. Living far from grocery stores, doctors, pharmacies and other necessary places can add significantly to your household budget, whether you drive yourself or take public transportation.

State Benefits

Depending on where you live, your Medicaid benefits could range from generous to very low, potentially leaving you on the hook for expensive in-home or facility-based care. Medicare premiums vary from state to state as well. If you’re able to self-fund your medical care, this may not affect you as much. But if you need to rely on state benefits, be sure to research the costs and coverage in the state where you intend to retire.

Overall Cost of Living

The cost of everyday items such as groceries, clothing, home services and more can vary tremendously depending on whether you’re located in a big city or rural area. With so many factors to consider for retirement, using an online calculator to help project cost of living in areas you’re considering can be a useful starting point. However, it may also be helpful to speak to a financial professional to help you figure out what you can afford, and which area suits your budget best, so you can adjust your retirement plan accordingly.

The last few months have been a whirlwind for cryptocurrency. Markets have dipped several times, including the drama of mid-2022, which saw the popular cryptocurrency Bitcoin fall in value by 70% from its all-time peak in November 2021. But despite the unsteady markets of late, Bitcoin is making its way into the offerings of some 401(k) plans.

In May of 2022, Fidelity announced it would soon begin allowing participants to allocate up to 20% of their retirement savings to Bitcoin. A much smaller provider, ForUsAll, made a similar announcement in June, and more may follow suit in the months and years to come. While cryptocurrency has been a lucrative investment for some, it’s important for investors to weigh their options carefully and approach crypto with caution if their retirement plan begins offering it.

Volatile Assets Mean Higher Risk Levels

Cryptocurrency is a notoriously volatile asset. This means the values of cryptocurrencies tend to go up and down often, and by large amounts. Significant upswings and downswings in a single day have made frequent headlines. Several economists have noted that cryptocurrency doesn’t tend to behave similarly to other asset classes given similar market conditions, making it increasingly hard to predict how crypto will perform in periods of inflation or recession, for example.

Caution Is Warranted

One of the best ways to make sure you’re making the right decision before you add cryptocurrency to your portfolio is to do your homework. Cryptocurrency is a new asset with different underlying mechanisms than stocks, so it’s important to understand the technology that enables crypto and the factors that influence its value before you invest.

A good rule of thumb is to only invest money in cryptocurrency that you’re prepared to lose. Some investors have lost nearly all of their crypto, whether due to market drops, crypto provider failures or even rare instances of hacking. In addition, cryptocurrency is decentralized, which means that no government or single financial institution backs it, even when it’s included in a highly regulated account like a 401(k). If this is money that you’re depending on, a more stable asset with a strong institutional backing may well be a better choice for you.

Let a Professional Help You

Though some successful investors and celebrities have touted the benefits of cryptocurrency, it’s important not to be swayed by the hype, particularly when you’re saving for retirement. Remember, high-income investors can afford to lose money due to volatility that everyday retirement savers might not be prepared to lose.

Do your research, make sure you understand this asset and be prepared for high volatility. It’s also important to diversify your portfolio and choose a mixture of assets to balance it out. If you’re planning to add cryptocurrency to your retirement fund, it may be useful to talk to a financial professional first who can help you find the right amount of cryptocurrency for your portfolio — which for many might be exactly zero, depending on their personal risk tolerance.

From guidance counselors and parents to your soccer coach and nosy neighbors, everyone seems to be interested in where you’re planning on going to college. And with good reason — there’s a lot to consider when making this important decision, beyond just picking the right university or vocational school and figuring out your major. Education costs money … a lot of it. But with some practical planning, there are ways to rein in college costs even if your college fund hasn’t caught up with your dreams quite yet.

Figure out What You’ve Got to Work With

Have the “money talk” with your parents. Find out if they — or your grandparents — have funds put aside for you like a tax-advantaged 529 college savings plan. If they do, know that the impact on your financial aid is different based on whether your parents or your grandparents started the account. And don’t forget to ask for money toward your college fund for birthday presents and holiday gifts to bolster your savings.

Stretch Your Budget

Rather than going straight to a four-year school, consider spending your first year or two at a community college. Community college can cost much less — plus, you could potentially save on living expenses by commuting. You can then transfer to the school of your dreams in a year or two to dig into your major.

Plan Your Way Out of a Jam

Talk to your college advisor about the feasibility of graduating early. Look into concurrent enrollment programs that allow you to take reduced-cost college classes while in high school. AP testing and CLEP tests can also help you receive credit at a reduced rate and speed up your graduation date. Graduating even one semester early can save you thousands of dollars in tuition, housing and other expenses.

Scholarships Are Free Money

In addition to academic and sports scholarships, there are also community-based, gender and subject area scholarships. Once you’re in college, you can work with your major department or honor society to take advantage of these programs. Look into smaller scholarships as well. Sometimes they’re easier to get, and a lot of small scholarships can add up to more money. And don’t forget about grants if you have financial need. Many states and colleges offer their own need-based grant, research and scholarship programs that you can apply for.

Work-study and Summer Jobs

Instead of taking out more student loans, look for opportunities to participate in federal work-study. These are programs that provide you work during the semester and can help you reduce the need for debt. A summer job can build up your resume and help toward paying your college expenses for the coming year.

Get Ahead of Debt

Make sure you fill out the Free Application for Federal Student Aid each year to take advantage of grants, work-study and some scholarships. Speak with a financial professional to help you take steps now to sidestep serious debt and make your transition into life on your own as smooth as possible.