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Understanding the Basics

Bridging the Retirement Insurance Gap

Your insurance requirements—and the steps you take to satisfy them—are likely to change once you retire. The biggest change will be in the area of company-sponsored medical coverage.

Your employer may or may not provide medical insurance to you and your dependents when you retire. How long you've been employed and the age at which you retire, will, in most cases, determine if you are eligible for retiree medical benefits (if any are offered by the company). And, once you reach age 65, any company plan coverage you have will be secondary to, and will generally supplement any Medicare coverage.

IMPORTANT NOTE: To make sure you have adequate coverage, it's important to understand the coverage provided by your company, Medicare, and other medical coverage that can be obtained when you retire. Getting caught without adequate medical coverage can be costly and result in a financial disaster.

You need to educate yourself about traditional fee-for-service Medicare—what it pays for, and what it doesn't pay for. You should also look into Medicare Part C: Medicare Advantage, a private plan alternative. You may need to sign up for a Medigap policy to ensure that you have enough coverage.

Beyond these more immediate medical insurance needs, you may want to purchase Long-Term Care insurance, which would help you in the event of progressive disability as you age. And you may or may not want to purchase Life Insurance, or continue with your present life insurance, depending on your family and financial situation.

IMPORTANT NOTE: The Affordable Care Act did not change Medicare or how you apply for it, and people age 65 and older (and people under 65 who have certain disabilities), in most cases, were able to keep their Medicare Advantage Plans when the law went into effect. However, the Affordable Care Act does make some provisions for seniors on Medicare, mainly regarding prescription drug costs. Seniors may be able to save money on prescriptions through a discount available to people who fall into the Medicare "donut hole." The donut hole refers to the coverage gap in Medicare Part D between reaching the deductible and a pre-set spending limit, and reaching the annual out-of-pocket spending limit. Discounts available under the Affordable Care Act can reduce these out-of-pocket prescription expenses. Seniors on Medicare are also eligible for a free annual wellness visit and, potentially, a greater selection of Medicare Advantage Plans under the Affordable Care Act.

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Investment and insurance products and services are offered through Osaic Institutions, INC. Member FINRA/SIPC. Eaton Financial Services is a trade name of the bank. Osaic and the bank are not affiliated. Products and services made available through Osaic are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.



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