WSJ published a story late August, prior to the latest stock market collapse, for near-retirees and the first item on the list was to establish a “health-care fund.” If you are still considering retirement (some have decided to defer retirement for a year or two to make up for the retirement fund shortfall, this is very valuable advice you should pay close attention to.
You’re probably familiar with emergency funds – the pot of money you set aside to cover short term emergencies like unexpected medical bills, car breakdowns, home repairs, etc. The health-care fund is an extension of that concept but applicable to what will likely be one of the biggest challenges of your entire retirement – your health. The idea behind the fund is that you should have enough in that fund to pay for all your medical needs from monthly health insurance premiums to co-pays to any potential medical problems you may encounter.
Another important piece of advice is to get a physical to learn whether you are an at-risk individual. You don’t want to cancel your current insurance only to find out you can’t get insurance!
Ready to Retire? First Plan Your Exit Strategy [The Wall Street Journal]