How Open Enrollment Affects Your Financial Planning Strategy

Women thinking about her financial planning strategy

Every November, individuals across the United States are assigned the task of reviewing their current medical coverage and deciding whether or not to switch healthcare plans. This is an important time of year for everyone— and for more reasons than may you think. The obvious reason is to find an affordable healthcare plan that covers your prescription drug costs, doctor’s visits, blood tests, and so on. Perhaps the less obvious reason is how the choices you make now on healthcare coverage will impact your later retirement years.

Today, more and more sources are claiming that in order to achieve an enjoyable and comfortable retirement lifestyle, individuals must first align their healthcare plans with their overall financial planning strategy.

Here is a quick breakdown of how insurance may affect your retirement planning goals:

Preparing for the Unexpected:

Depending on the amount of coverage you choose, major medical insurance is designed to help you receive the healthcare services and treatments you need to live longer and healthier. In addition, your insurance policy should cover costly medical bills that result from unexpected injuries or illnesses.

For example, if you sustain an injury or become sick, and your plan does not cover treatment, your only option may be withdrawing funds from your 401(k) savings. And taking large sums of money out of your retirement nest egg, not to mention being hit with a 10% withdrawal fee if you’re under the age of 59 ½, means less money for you when you retire.

Employer Retirement Package with No Health Coverage:

Another scenario to consider is whether or not your employer’s retirement package will include health insurance coverage. If it doesn’t include coverage for prescription drug costs or doctor visits, then you will be paying out of pocket for those expenses. This again means more of your savings will go towards medical costs and less will go towards your future goals.

Finding the Right Financial Planning Strategy:

Understanding the relationship between healthcare insurance and retirement is the first step toward creating a strong financial planning strategy. At Focus Financial, we’re here to help! Through a free consultation, we’ll meet with you to discuss and assess your current financial plan, needs, and future goals. From there, we’ll design you a personalized solution. We also provide ongoing guidance to help you make the right investments now, so you can avoid losing your hard-earned savings when you retire.

Contact us today to learn more!