Retirement Guide to Staying Active & Healthy While Reducing Medical Costs

In 2018, Fidelity’s retiree healthcare costs estimate suggested that a 65-year old couple retiring would need $280,000 to pay for medical expenses throughout retirement. An individual would need $157,500.

These anticipated expenses include insurance premiums and copays as well as other out-of-pocket expenses related to health care. How much medical expenses you have will depend on how healthy you are and what type of Medicare or health insurance coverage you have.

Here’s what you need to do to keep your expenses low well into the future.

It’s important to speak with your doctor before making changes to your diet and exercise routine. The tips offered in this article are intended solely for educational purposes and cannot substitute professional medical advice.

Key Takeaways It’s important to add health insurance to your retirement budget if you will not have Medicare coverage right away. You have the option each year to swap out Medicare Parts A and B for Part C, Medicare Advantage, which offers the same medical coverage but also includes vision, dental and hearing. Medicare supplements, like Part D for prescription drugs, are designed to cover the gaps in your Medicare coverage. Staying fit will reduce medical costs. Regular screenings and immunizations will reduce health care costs down the road.

Staying Healthy: How To Live Actively

Staying fit will reduce medical costs. Exercise is necessary to stay healthy no matter your age, but it becomes increasingly so as you become a senior. To maintain mobility, exercise is crucial. It doesn’t have to be a big expense either. Long daily walks at a brisk pace cost nothing but time, and you’ll have lots of it in retirement. Impact activities like walking are important to maintain healthy bones, and your metabolism will thank you too.

Running is great too but hard on the joints, so it may be time to switch over to power walking, depending on your fitness level and how your knees and ankles feel.

There are many types of exercise that will reduce medical expenses, and you can make it a point to walk instead of driving, when possible. Use the stairs instead of elevators. Join a recreational sports team in your community. Even bowling is better than sitting in front of a television set. If you want to retain your mobility, you’ve got to use your body!

The following are great types of exercise for seniors:

• Walking and Hiking
• Yoga
• Pilates
• Weight Training
• Swimming
• Water Aerobics
• Tai Chi
• Cycling
• Zumba

Exercises to avoid include:

• Squats with weights
• Bench press
• Leg press
• Running
• Crunches
• Upright row
• Overhead press
• Deadlift
• High-intensity interval training
• Rock climbing
• Sprinting
• Heavy weights
• Plyometric exercises (“jump” training)

While Medicare does not cover gym memberships, there are ways to earn senior discounts, like through AARP. Also, Medicare Advantage has SilverSneakers^® and Silver & Fit Programs, which offer free gym memberships, a kit to start a home gym and access to senior fitness programs in your area.

Diet and Nutrition

Each senior has unique dietary needs so it’s important to review annual blood draws with your doctor to determine how to shape your diet. If a doctor puts you on a special diet, it’s important to stick to it.

If you have no dietary restrictions, it’s still a good idea to cut back on sugar, excess caffeine, processed foods and soda. It’s easy to put on a few extra pounds as we age but keeping active, exercising and avoiding excess food and alcohol consumption can keep you fit. Staying adequately hydrated is always a good idea.

Mental Health Management

Staying connected with peers is a great way to avoid isolation and other mental health challenges that aging seniors face. You can either connect through recreational programs in your community, which are usually very affordable and create opportunities for meeting others in the same age group. Here are also some apps and websites that can help you make new friends:

• Amintro is a social platform for adults 50+ looking for new friends.
• Senior Planet Community is a social media platform designed for older adults.
• Stitch is an app designed to bring older adults together.
• Meetup is a great app and website that allows you to take part in activities in your area and meet new people.

If you’re struggling with stress, depression and anxiety or other mental health issues, it’s important to talk to a doctor, possibly a psychiatrist. Also helpful are other coping strategies such as mind/body exercises and the following:

Talk Therapy

Health insurance and Medicare will cover talk therapy, at least partially. Look into your policy and ask about copays and coinsurance so you’re prepared for the cost. You can also try group therapy to save lots of money and meet people at the same time.

Online services like Talkspace or BetterHelp offer subscription plans, ranging anywhere from one to four or more sessions per month. Monthly costs are anywhere between $200 and $600 a month depending on the frequency of virtual visits. Sessions last anywhere between 30 to 45 minutes.

Meditation

Free meditation classes abound wherever there are yoga classes! Just do a Google search for “free meditation near me” and you should be able to find one. If not, consider calling up a few yoga studios to see if they can help guide you in the right direction.

You can also try these meditation apps:

• Headspace ($12.99/month)
• Calm ($14.99/month)
• Healthy Minds Program (free)

Massage

Treating yourself to a massage here and there may help you alleviate some stress. It’s also a good reason to get out of the house and get pampered.

Yoga

Finding the right yoga class is key, so find one with a focus on mindfulness rather than exercise. People who regularly take yoga classes often report feeling more grounded and able to better handle stressful situations. Not only does yoga tone the body and speed up the metabolism, it can have therapeutic benefits for the mind as well.

Preventative Care and Screenings

Consider what ailments most seniors have and the reasons why they get sick, and there’s a good chance that there are preventative measures you can take to avoid the same problems. Having regular mammograms, colonoscopies, prostate checks and other types of screenings is vital to longevity and a healthier life condition overall.

Vaccines and immunizations also fall into the category of preventative care. A flu or Covid shot can protect you from getting sick or, in some cases, it can prevent debilitating sickness even if you’re infected. Mumps, measles and shingles also have immunizations.

If you were once a smoker or are still a smoker, discuss specific screenings that are designed for high-risk individuals with a smoking history. If you are at high risk for a heart attack, your doctor may prescribe a statin drug.

Everyone’s needs are different, so it’s important to discuss your full health profile with a trusted physician so you can get the right screenings and immunizations.

Gap in Insurance Coverage for Early Retirees

The average age of retirees is 58, which leaves them without Medicare coverage. A gap in health insurance can be very expensive and so will buying health insurance as a senior. However, nothing is as expensive as going without health insurance if we sustain an injury or our health takes a turn for the worse.

It’s important to add health insurance to your retirement budget if you will not have Medicare coverage right away. Even if the most you can budget is a high deductible health plan with an HSA, it’s better than having no coverage at all!

If you’re an early retiree, the cheapest way to get health insurance coverage is through a partner. You can also buy an individual health insurance policy. Cobra may help if you only have a short while, say a year, before you’re eligible for Medicare coverage.

It’s not a good idea to try and create a health insurance plan with a short-term health insurance policy or with hospital indemnity coverage alone. These options are not substitutes for health insurance. However, you may save money by having one or several supplemental insurance coverages in addition to your health insurance or Medicare coverage.

Understand Your Medicare Coverage

You are eligible for Medicare three months before you turn 65 and until you’re three months into your 65th year. If you are late, you will be penalized each month for Part B coverage for the duration of your lifetime coverage unless you have other comprehensive health insurance coverage. A short-term health insurance policy would not suffice.

When you apply for Medicare, you will have the option of buying Original Medicare (Parts A and B) or Medicare Advantage (Part C). You will also have the option of buying Medicare Supplements and a Part D prescription drug plan. See more on your Medicare options below.

Medicare doesn’t cover everything and it’s not free. Remember that Medicare Part B has a premium that is deducted from your social security check. You also have the option each year to swap out Parts A and B for Part C, Medicare Advantage, which offers the same medical coverage but also includes vision, dental and hearing. It also offers discounts on wellness programs and gyms.

If you stick with original medicare, buy Medicare Supplements to save on out-of-pocket expenses.

You cannot buy Medicare Advantage and Medicare supplements – only one or the other.

Prescription Drug Costs: Medicare Part D, Medicare Supplements or Medicare Advantage?

Medicare supplements are designed to cover the gaps in your Medicare coverage. Medicare doesn't cover all medical expenses. You’ll need to buy Part D for prescription drug coverage.

Many Medicare Advantage plans include Part D prescription drug coverage and also includes vision, dental and hearing (in many but not all plans) whereas original Medicare does not. Medicare Advantage works through private health insurance companies whereas Medicare is governed by the federal government. With that said, Medicare Advantage plans also follow guidelines set by the government.

In addition to prescription drug coverage, there are other ways to avoid paying too much for your prescriptions.

Generic Prescription Medications

It’s easy enough and many doctors do it without prodding, but buying generic prescription drugs reduces the cost quite a lot. Generic drugs are just as safe as the brand-name drug and many people even take them not knowing it’s the generic version.

Buying Medication in Bulk

Buying medication in bulk can result in lots of savings but the trick is to talk to the doctor and your insurance company beforehand to make sure they are willing to prescribe more and cover the large cost with insurance. A 90-day supply will cost you less than buying 30 days at a time. If it’s possible to go even longer, it’ll cost you even less.

Supplemental Insurance

Supplemental health insurance can save you some money by adding more coverages to your main health insurance policy. Dental and vision insurance are common examples of supplemental insurance, because dental and vision are excluded in original Medicare plans and most traditional health insurance plans.

Long-term care is another consideration, as it relates to assistance with meals and bathing, at home or in an assisted living facility. Remember that Medicare does not cover the daily tasks of Medicare recipients, only skilled care, like nurses and physicians.

Depending on your health, you may need to consider a traditional long-term care insurance policy or a hybrid long-term care insurance policy, which combines long-term care insurance with a permanent life insurance policy or an annuity.

Long-term care is expensive and rates are only guaranteed on a hybrid policy, but some people never end up needing long-term care, so keep your health top of mind so you can avoid paying expensive premiums for coverage. However, if you do end up needing assistance, it’s less expensive to pay for a long-term care policy than it is to pay out-of-pocket for expenses.

Health Savings Account (HSA) Funds

If you’re retiring early, start contributing to one if you can. For 2024, the limit of contributions to a health savings account (HSA) is $5,150 for a 55+ individual and $9,300 for family enrollments.

To be eligible for an HSA, no one can claim you as a dependent and you must have a high deductible health plan (HDHP). You cannot have an HSA with a Medicare plan. In fact, you will need to stop contributing to the HSA account six months prior to enrolling in Medicare.

HSA’s take pre-tax contributions from you and store them in a fund that you can dip into for qualified health expenses, but after you enroll in Medicare you can no longer fund that account. You may, however, use the remaining funds for qualified health expenses.

Remove Falling Hazards

Falls can be deadly for seniors, especially if they take blood thinners and hit their heads. It’s a good idea to do a thorough scan of the home and outdoor areas for hazardous stairs, rugs that may cause trip-and-fall accidents and any other hazardous conditions that may make someone lose balance or twist an ankle.

Consider Dental Bills

Going to the dentist is no fun, and the cost of it is pretty painful if you don’t have dental coverage, which is not included in Medicare and traditional health insurance plans. Vision is also not included but dental bills can be exorbitant, especially if you’re not going for regular dental cleanings.

Having to buy dentures or get implants is something that you can avoid if you start young enough. If you have been taking good care of your teeth, don’t stop just because you’re retired and Medicare does not cover it. You can always switch from original Medicare to a Medicare Advantage plan that includes dental. Or, you can buy a stand alone dental plan. If that is out of your budget, find a local dental school and see if you can have your dental work done there by a student. Dental discount plans, which offers discounts after an upfront cost and monthly installments.