equitable-advisorsThe average cost of an annual physical $199. A seasonal flu vaccine costs between $20 and $60. These are only a couple of the anticipated costs of healthcare for an uninsured individual. The unanticipated, ranging from accident to illness, can eat up savings and potentially send a person into substantial debt.
The good news is that there are ways to easily prevent this from happening to you.
Planning for your healthcare needs as part of a broader, strategic holistic life plan can help you save for expected medical costs — such as dental check-ups or routine wellness exams — as well as protect against sudden, potentially costly ones.
The first thing to do is ensure you have basic medical coverage. If you don’t have any significant health issues or chronic illnesses, you may want to consider starting with a high-deductible insurance plan that would enable you to participate in a tax-deferred Health Savings Account (HSA) annually.
With an HSA in 2021—which you can obtain on your own or through your employer— you can contribute up to $3,600 for individuals with self-only high-deductible health plans (HDHP) and $7,200 for individuals with family HDHP coverage. The money set aside in this type of account can be used to cover medical expenses throughout your lifetime, not just for the year. An HSA allows you to contribute funds pretax.
Participating in an HSA can help ease spending on items not covered in healthcare plans, like over-the-counter prescriptions, travel vaccines and diagnostic tests. Other ways to help prepare for your physical and fiscal well-being include:
- Invest in life insurance: If you have a spouse and/or children, life insurance is a smart investment to defend against uncertainties and to ensure their protection in the future. It also can provide the potential for tax-deferred growth and allow you to access your funds through loans and withdrawals for things such as retirement or long-term care.
- Invest in life insurance: If you have a spouse and/or children, life insurance is a smart investment to defend against uncertainties and to ensure their protection in the future. It also can provide the potential for tax-deferred growth and allow you to access your funds through loans and withdrawals for things such as retirement or long-term care.
- Enroll in a tax-deferred fund: The benefit to enrolling in a 403(b) or 457(b) is that contributions to these tax-deferred plans are deducted directly from your salary before your employer withholds income tax—out of sight, out of mind. For 2021, you can contribute up to $19,500 and an extra $6,500 if you are 50 and older.
- Set aside an emergency fund: Cut back on splurging for non-essentials, such as dining out or daily gourmet coffee, and put that cash into a fund for emergencies. Redirecting those expenses into a liquid savings account can help alleviate stress and worry if something unforeseen occurs.
If you need guidance on what may be appropriate for your specific situation, you might want to consider working with a financial professional. They are deeply invested in getting to know you and what’s important to you. By understanding those things first, they can then help you design a plan tailored to meet your specific needs, as well as ensure your overall well-being.
This article was written by an outside source and is provided for general information only. No part of this article should be considered or relied upon as financial, investment, legal or tax advice. Equitable Advisors and its associates and affiliates do not provide legal, tax or accounting advice or services.
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