How to plan for healthcare costs in retirement in India

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Knowing healthcare requirements in retirement

Healthcare requirements grow naturally with age. In retirement, you may have higher medical expenses due to chronic ailments, hospitalization, medication, and check-ups. Healthcare expenditure in India is on the rise, and if not factored in, can pound a hole in your retirement corpus. It is thus essential that you factor in healthcare costs in your retirement planning.

Estimate future healthcare expenses

Begin by approximating your healthcare requirements post-retirement. Take into account factors like lifestyle, hereditary medical problems in your family, and potential medical price inflation, which in India is approximately 8–10 percent every year. This implies a medical cost of Rs.5 lakh now may well be Rs.12–15 lakh in 20 years' time. Saving for this inflation allows your money to be enough to cover medical needs without altering your lifestyle.

Invest in a health insurance policy

Health insurance would be the best way to manage medical expenses in retirement. Buy comprehensive health covers for hospitalisation, pre-and-post hospitalisation expenses, and serious diseases. Senior citizen policies are specifically designed for retirees and have a higher sum assured. Better buy health insurance many years in advance of retirement since premiums rise with age and some illnesses can turn out to be uninsurable later on.

Create an independent health fund

Apart from insurance, it would be a good idea to maintain a different health fund. Set aside a part of your retirement corpus for strictly medical expenditure. It may be in liquid instruments like fixed deposits, liquid mutual funds, or even through a systematic withdrawal plan (SWP) where you have the facility to withdraw money as and when needed. A different fund avoids you withdrawing money from your retirement corpus when you are ill.

Account for long-term care and assisted living costs

Due to the increase in life expectancy, there is a need for long-term care and planning for assisted living. It may be costly to cater to assisted living centres, home nursing, or special medical care. Consider such care and factor them into your budget to avoid last-minute financial worries.

Renew your plan at regular intervals

Health care needs may vary over time. Review your health care plan and health insurance policy periodically to ensure it is sufficient. Roll over your investments and savings to keep pace with shifting needs and increasing costs. Organized retirement health care is not dollars and cents—it's about allowing golden years to be comfortable, dignified, and hassle-free.