According to the Institute on Aging, more than 40 million Americans are now over the age of 65. By 2030, older adults are expected to represent 20 percent of the entire US population. But although we know more of us are reaching retirement age, that doesn’t mean we’re prepared for it.
In fact, recent data shows that 74 percent of Americans are behind on their retirement planning. Simply put, Americans aren’t saving enough to sustain themselves during retirement. That can make it necessary to delay retirement or make huge sacrifices in order to support yourself on a fixed income.
Once you retire, every penny counts. Given the potentially daunting costs, it’s no surprise that many seniors make it their mission to skimp and save. Fortunately, reducing costs on major ticket items like insurance might be easier than you’d think. You’ll just need to become more familiar with the ways in which you might be able to save on health, home, and auto insurance.
According to the US Census Bureau, Medicare covered 16.7 percent of Americans in 2016. Last year, there were over 58 million Americans enrolled in the Medicare program, with 50 million of those beneficiaries enrolling due to their age.
AARP reports that 66 percent of those enrolled in Medicare are living with two or more chronic conditions. Medicare often allows beneficiaries to afford the care they need to maintain their quality of life. However, beneficiaries spent a median of $3,685 out of pocket last year on healthcare. And in 2013, half of all Medicare beneficiaries over the age of 85 spent 30 percent of their income on healthcare expenses.
That means it’s important for nearly all seniors to reduce their healthcare costs whenever possible. One way to do this is by taking the time to thoroughly research all available plans. By obtaining and comparing Medicare quotes and gaining a complete understanding of what’s covered and not covered under specific plans, you may be able to avoid some of those unexpected costs. If your medications aren’t covered by your plan or your pharmacy or physician is out-of-network, you could end up paying far more than you planned.
Despite the fact that carrying a mortgage into retirement isn’t typically recommended, a recent survey found that 44 percent of Americans between the ages of 40 and 70 have a mortgage when they leave the workforce. When coupled with the cost of homeowners insurance, the costs can be overwhelming.
Insurance Information Institute data from 2016 found that the average American pays nearly $1,100 annually for home insurance. While that’s certainly preferable to the costs of a total rebuild, it still may be tough for many seniors to continue to make payments on their home once they’ve retired.
If you’re looking for a way to save on home insurance premiums, you may want to get creative. Installing a water sensor or upgrading your security system could convince your insurer to offer you a 10 or 15 percent discount, while informing them that smoking is forbidden in your home could also save you some money every year. Living in a gated neighborhood with a Homeowners Association could also fetch you a discount. In this case, being retired can actually work in your favor; your insurer may give you a discount just because you’re at home more frequently and would be able to stop a burglar or a fire.
There are a lot of misconceptions about the factors that result in higher auto insurance premiums. For example, the color of your car doesn’t matter one bit to your insurer, though the make and model do. So if you decide to purchase a vehicle at an award winning VW dealership, your choice to get it in bright red won’t be what drives up your payments; it’ll be the safety ratings of the vehicle type or its likelihood of being stolen.
Just like a lot of people believe that a red car will send your car insurance bill soaring, there are those who assume that entering retirement will come with an automatic increase of premiums. Although older drivers do have higher crash rates than middle-aged motorists, many car insurance companies will discount your payments if you’re between the ages of 55 and 70, according to Esurance. Because you’re more experienced behind the wheel, they’ll often trust you to make good driving decisions.
There are also other ways for seniors to save on their car insurance payments. Taking a defensive driving course offered by AAA or AARP can yield an additional discount and keep you safe. Installing an anti-theft device on your vehicle or telling your insurer you no longer have to commute to work may also result in a discount. And of course, you can always shop around if your current insurer tries to increase your premiums.
As you head into retirement, you may be understandably be concerned about costs. Saving for retirement early can provide a lot of peace of mind, but it’s not the only way to save. By doing your research and inquiring about the types of discounts that may be available to you, your twilight years can become much more comfortable than anticipated.