‘Post retirement medical funds’ sounds technical and complicated. If you don’t fall into the retirement category, should you even care about them? After all, if you are under the age of 60, are you too young for a post retirement medical fund?
The quick answer is ‘Yes’ and ‘No’. Let me explain.
What is a Post Retirement Medical Fund?
The thought of retirement is met with either excitement or dread. Excitement, by those who have prepared for it. Dread, by those who realise that they have insufficient income or investments to take care of themselves after they retire.
Post retirement medical funds are one way of ensuring that you are prepared for your sunset years.
Why?
As people grow older, their medical expenses tend to increase. It is estimated that more than 50 per cent of an individual’s medical expenses are incurred during the retirement age. And if there is one thing we know about medical expenses it’s that they are expensive!
Imagine being in a situation where you no longer have a regular stream of income, but your expenses are rising! That is a recipe for disaster. And this is where post retirement medical funds come in.
Post retirement medical funds are insurance schemes that allow you to save for post retirement medical insurance.
How do Post Retirement Medical Funds Work?
When you are in active employment or self employment, you regularly invest an agreed upon amount into a post retirement medical fund. Similar to retirement funds, your investment will earn an annual investment income.
Once you reach the age of retirement, your investment amount is used to purchase a medical cover on your behalf. This medical cover will be used to cater for your medical expenses.
What are the Benefits of Post Retirement Medical Funds?
First and foremost, the headache of medical expenses in your older age is reduced drastically. The peace of mind that will result from this cannot be downplayed.
Secondly, it allows you to use the income from your retirement funds, to meet other expenses, as they arise.
Your Turn:
Investing in a post retirement medical fund is an affordable gift your younger self can give to your older self.
Will you consider investing in a post retirement medical fund?