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10 Ways to Save Money on Health Care Costs

10 Ways to Save Money on Health Care Costs

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 The money invested in an HSA is tax deductible, and it can grow and be withdrawn for qualified medical expenses tax free, giving it a triple tax advantage.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

How to Budget for a Pet

How to Budget for a Pet

If you’re a pet owner, you know just how much fun they can be. But adopting a pet is a big decision that comes with many responsibilities — and expenses. Here are some considerations when planning for the next four-legged addition to your family.

Adoption & Licensing

Most pets require spaying/neutering and vaccinations, and some may also need to be microchipped and trained. If you obtain your furry friend from a breeder, not only does the purchase price go up, but you may also have to pay all these expenses on top which can bring total costs above $6,000. In contrast, adopting a dog or cat from a shelter or rescue organization can be below $500, which generally includes initial vet work. You’re also giving an at-risk animal a happy home. Certain shelters will reduce the price further for older pets that can be good companions for seniors. In addition, some local governments require an annual license that‘s generally below $25 if you spay or neuter.

Food & Supplies

Fish, rodents and birds are often more economical to feed — from around $15 to $50 annually. Cats, ferrets and small dogs may cost approximately $200 to $325 per year, while larger dogs can run up to $400. These prices don’t include special treats or prescription food for older animals. Then come the supplies. Smaller animals can make up for their lower purchase cost with the need to maintain an aquarium, cage or other habitat. Cats and dogs have collars, leashes, crates, carriers and toys that you may replace several times during their lives. Cats have the infamous litter box to repeatedly fill, but dogs can have their own high-ticket demands: After all, they may be the reason you decide to fence in your yard!

Grooming & Veterinary Visits

Cats are generally self-cleaning and may even resent your efforts to groom them (thank you very much), although long hair varieties tend to require more maintenance. Dogs can be a different story. Some even love getting bathed and will try to get you to do it with them. But even if you handle bathing on your own, you’ll still need to buy shampoo, brushes and combs — and some breeds benefit from an occasional haircut. You’ll also need to schedule annual checkups with the vet and may have to purchase heartworm medication or a hairball preventative. You may also want to go to the vet between checkups for

certain delicate procedures you don’t feel comfortable with, like trimming nails or — yuck — expressing glands.

Pet Sitting

You can’t take your pet everywhere but getting a sitter before your vacation or during the holidays usually isn’t cheap. Professional pet sitters can charge different rates depending on the time frame. This can be around $75 a night. Another option is a boarding facility, where your pet can have 24-hour care for about $50 per night. And many pet parents choose to install in-home wifi cameras to monitor their pets when they’re out (some even include remote treat dispensers).

The Joy They Bring … Priceless

Some costs can be difficult to anticipate, such as a pet deposit or monthly fee for renters. It’s important to include all costs as budget line items. And consider a dedicated expense account for furry, feathery or scaly companions. But if you‘re responsible with your pet spending, you’ll find that all creatures great and small can be worth every penny for the joy they bring you.

Sources

https://pactforanimals.org/how-much-cheaper-is-adopting-a-dog-vs-buying-one/

https://www.cesarsway.com/5-reasons-to-get-your-dog-licensed

https://www.aspca.org/sites/default/files/pet_care_costs.pdf

https://homeguide.com/costs/pet-sitting-prices

https://homeguide.com/costs/dog-boarding-cost

 

 

Ease Into Retirement With a Smart Pre-game Strategy

Ease Into Retirement With a Smart Pre-game Strategy

Retirement is a major milestone — a moment to turn a new page to a chapter you’ve probably dreamed about for decades. People look forward to unencumbered schedules, freedom to travel, spending more time with relatives or moving to a dream home on the beach. Retirees often have big expectations about what a life of leisure may bring only to find out that they miss the routine and camaraderie of going to work each day. Or that moving to their favorite vacation destination means leaving all their friends behind.

It’s not uncommon for retirees to experience a surge of well-being and happiness directly after retirement, followed by a decline in life satisfaction as time passes. But you can avoid some of the stress and anxiety that retirement can bring with a smart pre-retirement strategy to help smooth out the transition.

Dip Your Toe in Retirement Waters

The day after you retire might seem like plunging into the deep end of the pool – your daily work-life routine suddenly stops cold. So, instead of jumping in, consider wading into retirement with a transitional job. Maybe your current employer will let you step down to part-time work for several months — or you can explore a new opportunity with a bridge job that keeps you in the workforce (and keeps your retirement account growing) while lightening your schedule. Your WellCents financial professional can help you figure out how much income you’ll need in order to make a gradual transition into retirement.

Retire to Something Else

Prior to your last day at work, make plans and lay the groundwork for what you’ll retire to — not just the job you’ll retire from. Join a community or volunteer organization now. Get to know them and what the possibilities are so that when you retire you’ve already found a group you like, and are ready to fully engage in — or ramp up — your participation. 

Relocate With Confidence

Moving closer to children and grandchildren or relocating to a favorite vacation destination can sound like the perfect retirement plan. But it can also lead to disappointment — family may be busy with other activities or your vacation spot might be lonely without a group of friends. Invest in your new community before you make the big move. Plan longer trips to the area so that you can take part in local activities, meet people, start new friendships and have something to do outside of your family circle.

Invest in Prep

Just like the time and financial investment you make toward retirement readiness, investing effort and energy into retirement prep can yield big rewards. Talk to your spouse, family and friends about the dream you have in mind for your golden years and discuss how it aligns with theirs. Make a plan and start investing in your dream well before your last day of work. Contact your WellCents financial professional to check your financial readiness and figure out the best time to kick off your retirement pre-game.

Source: https://www.apa.org/monitor/2014/01/retiring-minds

 

Gen Z — Start Investing Now!

Gen Z — Start Investing Now!

If you’re a member of Gen Z — those born after 1997 — now is a great time to start investing for retirement. The power of compounding returns is one of the best ways to grow wealth over time. And the earlier you start, the less you have to set aside each month to reach your goals.

Consider that a one-time $10,000 investment you make at age 20 would increase in value to more than $70,000 by age 60, assuming a 5% interest rate. Meanwhile, it would only grow to approximately $43,000 if you make it at age 30. And the same investment at age 40? That would grow to a mere $26,000. As you can see, when it comes to investing, time really is money.

Here’s how to make the most of your investment dollars.

Find a Way to Invest

Even coming up with $200 can feel like a daunting task at this point in your life. Not only is your starting salary likely to be lower today than it will be in a few years, but you might also have student loan debt and other bills to contend with.

The good news is that you don’t have to invest a lot to begin building your wealth and preparing for retirement. Start with what you can afford, even if it’s only $50 per paycheck. Look for ways to free up a small amount of money in your budget each month so that you can contribute to your 401(k) and start putting that money to work.

Have a Plan

Create a plan for increasing your contribution down the road. If your employer offers a 401(k) match, try to invest enough to get the maximum. That match represents free money — and it’s the best deal you’ll find in the world of investing. Once that money is in your account, it begins growing, and it can boost your overall portfolio down the road.

Plan to increase your retirement account contribution each time you get a raise. Depending on your company, you could even plan an incremental increase in your contribution each year. For example, you could arrange to increase your contribution by 1% each year up to a certain percentage of your income.

The important thing is to get started and then up those contributions as often as you can. Get in the habit of investing, and you’ll be more likely to reach your long-term wealth goals even if you have to start small.

Give Yourself a Cushion

No matter your situation, there’s a good chance that, at some point, you’ll end up with an emergency where you must come up with a significant sum of money all at once. This can be stressful, and you might consider tapping into your retirement savings to help cover the cost.

However, it’s better to avoid using your retirement investments for emergencies since an early withdrawal can result in hefty penalties. Even if you get a 401(k) loan and avoid the penalties and taxes, anytime your money is out of the market, it’s not working on your behalf. You might replace what you withdrew, but you can’t replace the opportunity cost of time in the market. This is why establishing an emergency fund is so important.

Don’t Go It Alone

Investing for retirement can be daunting if you’re just starting out. Contact your WellCents financial professional to help you set realistic goals to grow your nest egg over time and give you a head start on the road to retirement.

Source: 

https://www.investopedia.com/financial-edge/0212/5-advantages-to-investing-in-your-20s.aspx 

What If I Can’t Save Enough to Reach my Retirement Goals?

What If I Can’t Save Enough to Reach my Retirement Goals?

You just ran the numbers on your retirement and realized that you aren’t going to be able to save enough to make it happen. Don’t panic: There are still things you can do to better your situation, especially if you’re willing to be flexible about your plans and your lifestyle.

The first step is to determine exactly where you are. In retirement, you may have income from a number of sources:

  • Social Security
  • Pensions
  • Investment income
  • An inheritance
  • Earned income from a side hustle

Next, estimate the likely cost of your future monthly expenses: rent or mortgage, utilities, automobile payments and insurance, credit card and loan payments, food, health care (insurance plus out of pocket) and emergency repairs. A good way to capture these categories is to look at your credit card statements and checkbook and list everything you’re spending on now. If you haven’t kept track of this on paper, most online bank and credit card services offer easy access to your transaction history.

Leave out or lower your estimate for anything you won’t spend as much on when you’re retired (your commuting cost should go down, for example). Now, what about potential costs for travel, hobbies and other post-retirement fun? Will you set aside money to give to grandchildren or other relatives in the years ahead?

Once you have your monthly income and expense estimates, compare the two. Are you still coming up short?

If you don’t have enough income to cover your projected expenses, there are some things you can do. But first, there are some things you should definitely NOT do:

  • Panic.
  • Shift into higher-risk investments to try to capture higher returns.
  • Decide your head hurts, avoid thinking about it altogether and assume your health and career will allow you to work long enough to make up the difference.

Here are some things you CAN do:

  • Make catchup contributions to an IRA. The tax code allows workers over 50 to make extra, pre-tax contributions to boost their savings.
  • Re-think your lifestyle. Do you really need to live on a golf course? Maybe you could live near a golf course and be just as happy.
  • Take on a side hustle to create a little extra income. This could be something that’s been a hobby – tying fishing flies, restoring old cars, or knitting comforters. Or work a few hours a week at a friend’s business. Be aware, however, that your earnings may have implications for your taxes and Social Security benefits. Because the tax code governing what portion of benefits can be taxed is complex and subject to change, you should talk to an accountant or financial advisor well versed in that part of the code.
  • Do you have two cars? Maybe one would do. Or perhaps you can do just fine with a used model with a reputation for reliability and longevity.
  • Downsize. Move to a smaller house or condo, and if you’re single, maybe take on a roommate.
  • Consider relocating to a lower-cost area. The cost of living in Knoxville, TN is about 17% below the national average, and there are plenty of other places below the norm: Cheyenne, WY (-8%), Green Bay, WI (-10%) and Sherman, TX (-14%) are just a few.
  • Tap your home equity to pay expenses.
  • Consider a reverse mortgage. However, be aware that the reverse mortgage products offered by various lenders are wildly different in their terms and risks. Look at this very, very carefully before committing.
  • Delay taking Social Security benefits. Waiting until at least your full retirement age boosts your monthly check significantly; your monthly benefit will increase by about 0.67% for each month you delay past your full retirement age, and will add about 8% for each full year you wait until you reach age 70. Your full retirement age depends on your year of birth. Use the calculator on The Social Security Administration website to figure all of this out for your particular situation based on your personal earnings record.

But before you do any of these things, the most important step you can take is to talk to your financial advisor. Because they deal with the intricacies of the tax codes and Social Security every day, they can help you steer clear of landmines and set a course to that bright retirement you’ve been dreaming of.

Sources:

1. https://www.forbes.com/sites/investor/2017/06/09/what-to-do-when-you-havent-saved-enough-for-retirement/#368f06f06e20

2. https://www.aginginplace.org/are-there-taxes-on-social-security-for-seniors/

3. https://www.ssa.gov/planners/retire/1955-delay.html

4. https://www.kiplinger.com/slideshow/retirement/T047-S001-cheapest-places-where-you-ll-want-to-retire-2019/index.html

#save #retirement #future #wellcents

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