Ways to Approach Long-Term Medical Planning Before You Retire

For high earners who are approaching retirement, healthcare planning deserves the same intentional strategy as wealth building. Medical expenses can be a significant and unpredictable element of a comprehensive retirement plan, particularly for ultra-high-net-worth families. Thoughtful medical planning before you retire may help position you to plan for these costs with greater confidence.

Before transitioning into retirement, consider asking yourself:

• What healthcare coverage options are available to you?
• How could long-term care expenses impact your retirement savings?
• What tax-advantaged healthcare savings strategies should you consider?
• How can you coordinate Medicare with your existing insurance coverage?
• What role could HSAs and specialized accounts play in your healthcare planning?
• How can you plan for assisted living and nursing care needs?
• What estate planning considerations should you explore for healthcare directives?

Schedule a conversation with Avidian Wealth Solutions to explore how comprehensive financial planning could incorporate your healthcare considerations into your broader retirement strategy.

Healthcare costs in retirement: 7 questions to ask yourself before retiring

1. What healthcare coverage options are available to you?

Understanding the full landscape of healthcare coverage can help you make more informed decisions about your health and retirement strategy. The monthly cost of healthcare in retirement varies significantly depending on factors like your age, health status, geographic location, and the type of coverage you select. 

Private insurance, Medicare options, Medicare Supplement plans (Medigap), and Medicare Advantage plans each come with different premium structures, coverage levels, and out-of-pocket expense considerations. For high-net-worth individuals, evaluating these options alongside your broader financial picture may reveal opportunities to structure your healthcare coverage in ways that align with your retirement goals.

2. How could long-term care expenses impact your retirement savings?

Long-term care is one of the largest potential expenses in retirement, with costs that can quickly deplete even significant assets if not addressed proactively. Long-term care insurance may offer one approach to managing this risk, though policies vary widely in terms of coverage, elimination periods, and benefit structures. 

Exploring long-term care financial strategies that complement your overall wealth plan could help protect the assets you’ve worked to build. Whether through insurance products, self-funding approaches, or hybrid solutions, incorporating long-term care considerations into your planning may help you maximize retirement savings while preparing for potential future care needs.

3. What tax-advantaged healthcare savings strategies should you consider?

Strategic use of tax-advantaged accounts can play a meaningful role in retirement tax planning, particularly when it comes to healthcare expenses. Health Savings Accounts (HSAs) offer triple tax benefits — tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses — making them powerful tools within a comprehensive retirement planning framework. 

Beyond HSAs, coordinating retirement account distributions with healthcare planning, including Required Minimum Distributions (RMDs) and their timing, may present opportunities to structure withdrawals in more tax-efficient ways. For business owners and executives, exploring how various account types coordinate could reveal additional planning considerations.

4. What role could HSAs and specialized accounts play in your healthcare planning?

Health Savings Accounts (HSAs) and other specialized healthcare savings vehicles can serve as valuable components of retirement income planning when used strategically. HSAs function not only as healthcare expense accounts but also as potential long-term investment vehicles, particularly when you’re able to pay current medical expenses from other sources and allow HSA balances to grow. 

For high-income earners, maximizing HSA contributions during working years can create a substantial tax-free resource for future healthcare costs. Additionally, Flexible Spending Accounts (FSAs), dependent care accounts, and certain employer-sponsored health reimbursement arrangements may offer complementary benefits depending on your employment situation and family needs.

5. How can you coordinate Medicare with your existing insurance coverage?

Medicare enrollment timing and coordination can be complex, particularly for individuals with employer-sponsored coverage or those who’ve established a supplemental executive retirement plan (SERP) through their company. Understanding when to enroll in Medicare Part A and Part B, how Medicare coordinates with retiree health benefits, and whether supplemental coverage makes sense for your situation requires careful analysis. 

Some employer plans require specific enrollment actions, while others may penalize late Medicare enrollment. For executives transitioning from corporate benefits packages, evaluating how Medicare fits within your overall coverage strategy may help avoid gaps or unnecessary duplications in coverage.

6. How can you plan for assisted living and nursing care needs?

Planning for potential assisted living or skilled nursing care involves both financial and personal considerations that may evolve over time. The costs of quality care facilities can vary dramatically based on location, level of service, and amenities, with premium facilities in some regions exceeding $10,000 monthly. Beyond evaluating long-term care insurance or self-funding strategies, consider how your housing assets, income streams, and investment portfolio might be positioned to support various care scenarios. 

For those with retirement planning for a non-traditional career path — such as business owners, entrepreneurs, or those with variable income histories — structuring assets to maintain flexibility while making sure care options remain available may require specialized approaches.

7. What estate planning considerations should you explore for healthcare directives?

Healthcare directives and medical decision-making authority are critical components of comprehensive estate planning that directly impact your health and retirement strategy. Establishing healthcare powers of attorney, living wills, and HIPAA authorizations helps ensure your medical preferences are honored and that trusted individuals can access information and make decisions if you’re unable to do so. 

For high-net-worth families, these documents can coordinate with your broader estate plan, including trusts, beneficiary designations, and wealth transfer strategies. Additionally, considering how healthcare-related estate planning documents interact with long-term care planning, Medicaid planning (if relevant), and asset protection strategies may keep your quality care options accessible.

How to create a healthcare planning timeline

Healthcare planning for retirement isn’t a single decision made at age 65 — it’s a series of strategic considerations that unfold over several years. The specific timeline that makes sense for your situation will depend on your individual circumstances, but certain milestones typically warrant attention. Here are several ideas:

• 5 – 10 years before retirement: Review your current health insurance and prescription drug costs to establish baseline expectations. Begin maximizing HSA contributions if eligible, allowing these accounts to grow tax-free for future healthcare expenses.
• 3 – 5 years before retirement: Assess how healthcare coverage will transition from employer benefits to retirement options. Project potential healthcare costs based on your health status and family history. Consider how your retirement timeline might be influenced by healthcare coverage considerations, particularly if you’re retiring before Medicare eligibility.
• 1 – 2 years before retirement: Develop a detailed understanding of Medicare enrollment requirements and deadlines. Compare Medicare Supplement and Medicare Advantage options in your area. Review how your retirement income sources might impact Medicare premium surcharges. Coordinate healthcare planning with your broader retirement income and tax strategies.
• At age 65: Complete Medicare enrollment during your Initial Enrollment Period to avoid potential penalties. Finalize decisions about supplemental coverage. Ensure healthcare directives and powers of attorney are current and accessible.

This timeline provides a framework for approaching healthcare planning systematically rather than reactively. The earlier you begin integrating these considerations into your retirement planning, the more options you may have available to structure your healthcare strategy in ways that align with your broader financial goals.

Coordinate your healthcare strategy with guidance from Avidian Wealth Solutions

Thoughtful medical planning is a significant component of retirement preparedness, particularly for families with substantial assets and complex financial situations. The decisions you make about healthcare coverage, long-term care preparation, tax-advantaged savings strategies, and coordination with your broader wealth plan can have lasting implications for your financial security and quality of life in retirement.

For high-net-worth individuals and families in Houston, Austin, Sugar Land, and The Woodlands, working with advisors who understand how these elements interconnect may help you develop a more coordinated approach to retirement planning.

Schedule a conversation with Avidian Wealth Solutions to discuss how comprehensive financial planning could address your healthcare considerations alongside your investment management, tax strategy, and legacy goals. Our team works with families to explore strategies tailored to their unique circumstances, helping you approach retirement with increased clarity and confidence.

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