By Henni Espinosa
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San Francisco - Retirement is supposed to be a time to take things easy. But for many baby-boomers nearing retirement, the rising healthcare costs is only making them worry. One of them is 63-year old Florence Mendoza, who used to earn well as a high-end retail buyer for 20 years. But her company went bankrupt and she lost a lot of the money she invested in stocks. Mendoza says, “I worked hard for so many years. But where is my money?”
A single-mother, Mendoza says she’s worried about retiring, especially when she does not have enough money saved. She says, “I’m by myself. Who else can I turn to? That’s how it is here in America. You’re on your own, even if you have children.”
Mendoza says she has no choice but to continue working because she needs an employer who can provide her health insurance. Another single-mother, 53-year old Myra Garces says she may have to take a part-time job in the weekends to save more money for retirement.
Garces says, “Who wants to be a burden to anyone? I don’t want my children to have to worry about me.” Like many baby-boomers who lived a carefree life, not thinking about retirement costs…until now. She says, “When I heard about healthcare costs, I became concerned.”
Fidelity Investments recently released a report that says a person retiring at age 65 would have to spend about $80,000 to cover healthcare costs. If a person retires early, it would cost even more…about $100,000. Government-sponsored support such as Medicare would not be available for people until they reach the age of 65.
Financial expert Irwin Jose says baby-boomers who are still able should continue to work for an employer who provides them healthcare coverage.Jose says, “It’s good to know from your employer what kinds of benefits are available for you and what you need to do in case there are areas where you are not covered. But first, if you plan to retire, you need to assess your health situation.”
Jose says it’s never too late to start a separate fund specifically for healthcare costs, such as a HAS or Health Saving Account, much like an Individual Retirement Account or IRA. Contributions here can be tax-deductible. Many baby-boomers nearing retirement may feel it’s a little too late to start saving money for their healthcare. But financial experts say it’s better to start preparing now and put savings plan in place to give them health security in the near future.
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