Kentucky residents approaching retirement age know that money can be tighter during one’s senior years. Cutting costs in the monthly budget might become paramount to making ends meet. Considering medical costs can be the largest line item for seniors, focusing on health insurance is a form of smart financial planning.

Medicare is the most common form of health insurance for those 65 and older. But with Medicare, timing can be everything and affect the amount of medical costs covered. Some may not realize that Medicare penalizes those who sign up late. Worse, the penalties accumulate when the delay is longer. It is important for those nearing retirement age to learn the eligibility rules and to sign up as soon as eligibility is met.

Medicare does not cover all costs of medical treatment, and there are steep co-pays on some items. Non-hospital costs covered under Plan B carry a 20 percent co-pay for the subscriber. This is why purchasing supplemental insurance can make financial sense. Commonly referred to as “medigap” insurance, it can supplement payments for outpatient services.

Paying more into a health savings account now is a wise investment for future costs. A person obtains present tax benefits of between $3,000 and $6,900 per year for contributions. Those with smaller accounts can take advantage of a $1,000 per year “catch up” contribution. If necessary, the Health Savings Account can also be used prior to retirement.

Unfortunately, even the most diligent retirement planning cannot prevent certain debts from accumulating. If a couple has substantial medical debt, bankruptcy could provide a fresh financial start. An attorney can help with the filing process.