As a federal employee, you already enjoy one of the best retirement plans out there. Aside from a three-tiered income program, you also have another enormous advantage in the form of your healthcare plan.
Most American workers face a dilemma when planning their retirements: If they want to stop working before age 65 (the age of Medicare eligibility), they have to identify a way to pay for their own healthcare. This might mean enrolling in a health insurance plan on the open market, or (gulp) saving a chunk of money and attempting to self-pay for medical care.
Luckily, you don’t face such a difficult quandary. Federal employees who retire before age 65 can actually choose their retiree health benefits from a Preferred Provider Organization (PPO), or a Health Maintenance Organization (HMO). Some (those in excellent health, usually) even opt for a high-deductible plan that covers only catastrophic risks, in exchange for a very low premium.
Whichever type of plan you prefer, you will still incur some expenses related to medical care. So as you weigh your options, consider factors such as:
• Premiums
• Co-payments
• Annual deductibles, if any – how much can you realistically afford to pay before your insurance kicks in?
• The cost of prescription medications
• The cost of any uncovered equipment or services that you need
Before choosing a healthcare plan, consider the state of your health. Also, how many years will you need this plan, before turning 65 and enrolling in Medicare? You need a backup plan to pay for extra expenses in the event that your health takes a turn for the worse in the meantime.
For most retirees, healthcare is one of their largest expenses. It’s no different for federal employees; the difference is that you have more choices for insurance coverage before you turn 65. As you continue to plan for retirement, consult with us about your options and we can help you decide which type of healthcare plan fits your budget.
