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RETIREMENT SPOTS WITH AFFORDABLE HEALTH CARE

Out-of-pocket health care costs for retirees vary considerably by state.

Where you live could play a role in how much you pay for health care.

When deciding where to retire, a huge variety of factors come into play. There are financial considerations, such as the general cost of living and how many affordable homes are available. There are also lifestyle decisions including the kind of weather you prefer and how close it is to your family and friends. Retirees should, of course, think through all these factors. But here's one more to add to the list: the places that have the lowest health care costs for retirees.

Retirement health care costs are all over the board. However, costs will certainly rise as you age. Even those in excellent health at age 75 can expect to pay an average of over $5,000 per year in medical expenses, according to a Merrill Lynch report. Your costs may vary, though, depending on your health, age at retirement, retirement health benefits and other factors.

Still, you can actively work to reduce your retirement health care spending by choosing a state with lower average health care costs for retirees. Settling in a state with more affordable medical care, on average, could save you a bundle during retirement.

One new tool from HealthView Services allows financial planners to access cost information for Medicare Parts B, D and supplemental insurance for various states. The tool totals first-year and lifetime costs to give retirees a better idea of which states provide the most and least expensive health care to retirees.

Hawaii, surprisingly, has some of the lowest first-year and overall lifetime costs for Medicare users. For a 65-year-old starting coverage in 2015, first-year costs for Medicare Parts B, D and supplemental premiums in Hawaii would total about $2,818, according to HealthView. That's over $800 less than the $3,707 a retiree in Michigan would pay for similar coverage in the first year of retirement.

The more expensive premiums add up over a lifetime. HealthView estimates that premiums between ages 65 and 84 will total $112,528 for someone in Hawaii versus $152,175 in Michigan, a difference of nearly $40,000. Most of the cost differential is due to variations in the cost of Medicare supplemental insurance. Medicare Part D premiums also vary by state and the plan you select. Medicare Part B premiums are set by the federal government and do not vary based on where you live.

Of course, Medicare premiums aren't the only cost you should be concerned with. You will also face deductibles, copays and coinsurance. The cost retirees pay out-of-pocket for hospital and doctor visits, tests, prescription drugs and other medical expenses can vary from state to state. Retirees should look at actual health care costs by state, not just premiums.

The cost of tests and visits can vary dramatically from one hospital to the next, and this can be difficult to compare in advance of a procedure. According to the Kaiser Family Foundation, states where residents spend the least on health care include Wyoming, Vermont and the Dakotas. States where individuals spend the most include Texas, New York and California.

Some states with a relatively high cost of living have a relatively low cost of health care. So a move to Hawaii, which is known for its relatively high housing costs, might not end up saving you money, even if your health insurance premiums will be a little bit lower there. Before making a move, retirees should consider all the financial and lifestyle angles and total up their likely cost of living in any particular state.

Where to retire depends on a number of factors, including how much you have saved, what your retirement lifestyle looks like and the overall costs of living. But when calculating these numbers, don't forget one big one: the cost of health care.

The 10 Best Places to Retire on Social Security Alone

In these places, Social Security is likely to cover your basic monthly costs.

St. Louis and Pittsburgh are two of the cities where retirees can get by on their Social Security payment.

If you don't have a traditional pension through your job and haven't been saving a significant amount in a 401(k) or individual retirement account, Social Security is likely to be your largest source of retirement income. Almost all retirees (86 percent) receive Social Security payments, and for over a third (36 percent) of retirees, Social Security accounts for 90 percent or more of their retirement income. The type of lifestyle Social Security alone will provide largely depends on how much you have earned in Social Security benefits and where you live.

The average Social Security benefit for retired workers was $1,294 per month at the end of 2013. A couple who each brought in this amount would have $31,056 in annual Social Security benefits, which will also be adjusted for inflation each year. U.S. News analyzed Census Bureau and Bureau of Labor Statistics data to determine where a retired couple age 65 or older could cover their basic expenses, including typical costs for housing, food, utilities, transportation and health care, on this amount.

It’s important to note that in most places, Social Security alone barely covered these basic expenses. After paying for those five major costs, retirees living on Social Security alone likely won’t have much cash left over for recreation, hobbies, clothing, consumer goods or travel. “If they are highly dependent on Social Security, it is not an easy life,” says John Palmer, a Syracuse University professor and former public trustee for the Medicare and Social Security programs. “If they own their own home and don’t have high medical expenses, they can probably get by.”

Retirees would often be much more comfortable if they had income from another source in addition to Social Security, such as personal savings, a part-time job or a traditional pension. Taking steps to maximize your Social Security benefit is also important. “Not collecting until you are in your late 60s, if you can do it, is a good idea,” Palmer says. “For every year you retire earlier than that and choose to collect Social Security, your monthly benefit is about 7 to 8 percent less, and for every year you delay up to age 70, your benefit increases by 8 percent.”

In expensive cities including San Jose, California, Honolulu and San Francisco, Social Security alone did not cover the basic costs retirees face. “I wouldn’t want to try to make it just on Social Security in New York City or the D.C. area, but in a lot of the rest of the country, the cost of living is substantially lower,” says Kenneth Robinson, a certified financial planner for Practical Financial Planning in Cleveland. “Moving has expenses that go along with it, but if you have relatives who live in a less expensive place than where you are now, you might want to consider a move.”

In these cities, a household with typical expenses and two average Social Security checks coming in could get by on Social Security income. Here are 10 places where it’s possible for retirees to cover basic costs on Social Security alone:

Albuquerque, New Mexico

Albuquerque homeowners age 65 and older pay a median of $1,078 per month if they have a mortgage and just $368 monthly if they have paid off the mortgage. Senior citizen renters pay a median of $686 monthly to live in Albuquerque. The city also provides many services to retirees who don’t have a lot of extra cash. There are six senior centers where people age 50 and older can become members for just $13 a year. The Albuquerque 50+ Games is an athletic competition that includes bocce ball, tennis and pickleball exclusively for people 50 and older. And New Mexico residents age 65 and older can take classes at the University of New Mexico for just $5 per credit hour.

Austin, Texas

The low housing costs in Texas are drawing people to the state. A home in Austin costs retirees a median of $1,395 monthly with a mortgage and $545 if they own their home debt-free. The median rent for retirees age 65 and older is $887 monthly. Texas doesn’t have a state income tax, but it’s important to carefully consider the property tax you might face on any home purchase. This state capital city typically has mild and sunny winters that largely eliminate high heating bills, although you may pay significant cooling costs during the hottest summer months. Seniors age 65 and older even qualify for a tuition wavier on up to six credit hours at the University of Texas at Austin.

Buffalo, New York

If you can tolerate the cold and snowy winters in this upstate New York city, you’ll be rewarded with a very low cost of living. Senior citizen homeowners pay just $466 monthly in housing costs if they have paid off their mortgage and $1,009 monthly if they are still making payments on their home. The typical rent for retirees age 65 and older is $611 monthly. The City of Buffalo also provides a senior discount card that entitles retirees to a percentage off their purchases when they shop at local businesses, including restaurants, salons and pharmacies.

10 States Where Most People Don’t Get Retirement Benefits

Only about half of American employees participate in a workplace retirement plan.

Full-time workers in Florida are the least likely to receive retirement benefits.

If you receive retirement benefits through your job, consider yourself to be among the more fortunate half of the population. Only about half of full-time employees participate in a workplace retirement plan, according to a new report by the Pew Charitable Trusts. While 58 percent of workers are eligible for retirement benefits, just 49 percent of employees sign up for the retirement plan.

However, access to retirement benefits varies considerably by state and the industry that people work in. There are 17 states where less than half of workers participate in a retirement plan, Pew found. Here are the states where workers are the least likely to have retirement benefits:

Just 38 percent of full-time employees in the sunshine state participate in retirement benefits, the lowest of any state. Florida is also the state where the smallest proportion of workers (46 percent) are offered a retirement account or other type of retirement benefit by their employer.
Over a quarter (27 percent) of Nevada's full-time workers are employed in the leisure and hospitality industries, which are among the types of employers least likely to provide retirement benefits. Only 39 percent of workers in Nevada participate in a workplace retirement plan. About half of employees (51 percent) are eligible for retirement benefits at work.
Some 41 percent of Arizona workers participate in a retirement plan through their job. That's 11 percentage points less than the 52 percent of full-time employees who are offered retirement benefits at work.

New Mexico. Over a third of New Mexico employees work for small businesses with fewer than 50 employees, which are typically less likely to provide retirement benefits than larger companies. Just under half (49 percent) of New Mexico workers have the opportunity to sign up for retirement benefits at work, but only 41 percent of employees use their retirement accounts.

Exactly half of the Texas workforce is eligible for some form of workplace retirement benefit. However, only 41 percent of employees participate in a retirement plan. Texas has 3 million full-time private-sector employees without access to an employer-based retirement plan, Pew found.
Just over half (51 percent) of California workers qualify for retirement benefits at work, but only 44 percent of workers actually use the plan. Pew estimates that 4 million full-time private-sector employees in California don't have a workplace retirement plan.
Over a quarter of Louisiana workers earn less than $25,000 per year, which makes it difficult to fund a retirement account. Some 44 percent of Louisiana employees participate in a retirement account or pension, compared with 53 percent of people who are eleigible to do so.
Retirement saving in Arkansas is also hindered by the 28 percent of full-time workers who earn less than $25,000 per year. This helps to explain why there are 10 percentage points more Arkansas workers who are eligible to participate in retirement benefits (55 percent) than who actually save in the plan (45 percent).
Some 45 percent of Georgia workers participate in a pension, 401(k) plan or similar type of retirement benefit. Slightly more workers (53 percent) have the option to use a retirement plan if they take action to join one and can afford to save in it.
Over half (55 percent) of workers in Mississippi are eligible to join a retirement plan. However, only 47 percent of Mississippi workers actually use their retirement benefits.

Retirement benefits are most prevalent among people who live in the Midwest and New England. In Minnesota and Wisconsin, the states with the highest retirement benefit participation, 61 percent of workers have joined their workplace retirement plans.

Employees without retirement benefits at work have the option to save for retirement in a traditional IRA, Roth IRA or myRA. These retirement accounts offer similar tax breaks to 401(k) plans, but the contribution limits are much lower.

Want to Keep Your Medicare Costs Down? Get These 5 Screenings

Doctors say these free screenings are key to preventing costly medical problems.

From cardiovascular disease to glaucoma, these screenings can prevent small issues from turning into big problems.

When it comes to keeping health care costs in check, Benjamin Franklin may have been on to something. He is said to have originated the axiom “an ounce of prevention is worth a pound of cure” – a truth helpful for anyone hoping to keep their out-of-pocket Medicare costs to a minimum.

Take, for instance, a patient with high blood pressure. Annual costs to treat hypertension in adults was $733 per person in 2010, according to a 2013 Agency for Healthcare Research and Quality report. If left untreated, that patient could experience a stroke, which can come with a bill over $20,000. While Medicare would pay a portion of the expenses in both cases, a patient would undoubtedly spend more on a stroke than on medication for high blood pressure.

Fortunately, Medicare makes it simple to identify many small issues before they turn into big problems. Doctors say the following five screenings are health care essentials. Best of all, Medicare will pick up 100 percent of the tab for most of them.

Cardiovascular Disease Screenings

Detect or prevent: Heart disease, heart attack, stroke, vascular dementia

Dr. Robert Vogel, co-author of “The Pritikin Edge: 10 Essential Ingredients for a Long and Delicious Life” and advocate for the cardiac rehab program Pritikin ICR, says it’s never too late for seniors to become heart healthy. “Without question, I don’t care if you’re 40 years old or 80 years old, the opportunity to correct youthful indiscretions is still there,” he says.

Correcting past health mistakes involves eating right, avoiding a sedentary lifestyle and potentially losing weight. Vogel recommends seniors first see their doctor for a cardiac risk assessment. The process involves measuring blood pressure, cholesterol and glucose levels as well as answering questions about family history and lifestyle choices.

“Most people don’t understand it’s not just about death,” Vogel says. While seniors may assume a heart attack or stroke will be a life-ending event, many people survive and are left with impaired abilities, loss of independence and ongoing medical bills.

What’s more, poor heart health is linked to some cases of dementia. “People who have bad hearts often have bad brains,” says Dr. Fred Rubin, professor of medicine at the University of Pittsburgh. The hardening of arteries in the brain can cause vascular dementia, a condition with symptoms similar to Alzheimer’s disease.

While treating cardiovascular conditions is expensive, Vogel says proper screening along with lifestyle changes and medication can prevent most cases of heart disease.

Medicare will pay for the following cardiovascular health screenings, free of charge:

A screening every five years to test cholesterol, lipid, lipoprotein and triglyceride levels
An annual primary care visit to check blood pressure and discuss nutrition and other heart-healthy habits
Obesity screenings and counseling from primary care doctors

Colonoscopy or CT Colonography

Detect or prevent: Colorectal cancer

Colon cancer and colorectal cancer are other conditions people may be able to avoid with proper screening. “Unlike the other major cancers, they are almost entirely preventable,” says Dr. Perry Pickhardt, professor of radiology at the University of Wisconsin School of Medicine and Public Health. “It really shouldn’t be on the top 10 cancer list if people had appropriate screenings.”

The most common way to detect these cancers or polyps that may turn into cancer is through a colonoscopy. Medicare will cover the complete cost of a colonoscopy every 120 months or every 24 months for those at high risk. If polyps are removed during the procedure, a patient may have coinsurance or copayment costs.

While colonoscopies are effective, Pickhardt is a fan of what he hopes will someday become the standard screening for colorectal cancers: CT colonographies. Unlike a colonoscopy, a colonography is a noninvasive scan that can be performed without needles, sedation or pain. Plus, it’s about a quarter of the cost of a colonoscopy. “It’s just as good as a colonoscopy at identifying large polyps,” Pickhardt says. “It’s the best kept secret in the medical world.”

Medicare does not currently cover the cost of a CT colonography as a screening tool, although Pickhardt says the government is reviewing whether to include it as a covered service. In the meantime, seniors will have to shell out around $500 for the test, although the cost may vary by region and facility. That can be a steep price to pay, but it’s certainly cheaper than the $50,000 the National Cancer Institute estimates it costs for treatment during the first year of a colorectal cancer diagnosis.

Depression and Alcohol Screenings

Detect or prevent: Liver problems, memory problems, harmful drug interactions

The dollar savings attributable to alcohol and depression screenings are less clear than those linked to cardiovascular and cancer screenings. Still, that shouldn’t dissuade seniors and their families from using these services.

“My take on the purpose of screenings isn’t to save money,” Rubin says. “It’s to improve quality of life.”

Depression can be a socially isolating condition, and one that has been linked to problems like memory loss. It may also lead to seniors abusing alcohol, which can lead to a number of other problems. Excess drinking can complicate conditions like diabetes, and alcohol can interact negatively with some medications.

Medicare will pay for one alcohol misuse screening and one depression screening per year. Seniors who meet criteria for alcohol misuse can then receive four free face-to-face counseling sessions per year.

“It’s pretty straightforward to screen for depression [and alcohol misuse],” Rubin says. “If untreated, it has profound negative effects on a person’s life.”

Mammograms

Detect or prevent: Breast cancer

One in 28 women will develop breast cancer between ages 60 and 70, according to the National Cancer Institute. For women age 65 or older, the average cost of treatment during the first year after diagnosis is more than $23,000.

While the cost of treatment is substantial, most seniors don’t have to pay a dime for a mammogram to screen for cancer. Medicare pays for one mammogram every 12 months for women age 40 or older.

Rubin says there are diminishing returns on the value of mammograms for older women, and he recommends those age 75 or older forego them. At that point, a women’s life expectancy may not be long enough to warrant continued testing, he says. For women ages 65 to 74 with a life expectancy of 10 years or less, Rubin suggests they discuss with their doctors whether ongoing mammograms are needed.

Glaucoma Tests

Detect or prevent: Blindness

Glaucoma and macular degeneration are two other screenings Rubin recommends. "[You] have no symptoms until you don’t see, but these things can be easily screened,” he says.

Medicare typically doesn’t cover eye examinations, with the exception of glaucoma tests. The government will pay for one screening every 12 months for people who fall into one of the following high-risk categories:

Diabetes patients
Those with a family history of glaucoma
African-Americans age 50 or older
Hispanics age 65 and older

Glaucoma tests are the one service on this list that come at a cost to patients. Those eligible for the screening will need to pay 20 percent of the cost, and the Part B deductible must be met before Medicare will pick up the remaining 80 percent.
Some seniors may balk at health screenings, but that could be a mistake. Rubin emphasizes that testing is not so much about saving money or extending lives as it is about making the most of the time people have left.

How to Live Within Your Means

Try these strategies to control your expenses in retirement.

There are many ways to trim costs without reducing your quality of life.

When you retire you no longer get a paycheck. You knew it was going to happen. But knowing it and experiencing it are two different things. If you are struggling to live within your budget, here are five suggestions that will bring your retirement expenses into line with your more modest retirement income.

1. Cut back where it doesn't count. The key is to economize on goods and services that you don't really use or care about, so you hardly notice the difference. Once your kids leave home, reassess your bills to make sure you're not paying for things that were important to your kids but that you don't use, such as a family membership at the sports club or a high cost cellphone service. Maybe you don't need a land line if everyone in the household has their own smartphone. Maybe you no longer need cable if you have Netflix and Amazon Prime. And maybe you don't need to shop at a big box store anymore. Remember, you're only cooking for yourself now, not a whole crew, so you don't need a four gallon pack of orange juice, no matter how great a bargain it is. And if this seems like small potatoes, remember, one small change might not make a difference, but several can add up to real money.

2. Sell what you aren't using. You might have a basement full of old books, sports equipment and furniture. You can let it mold and later pay someone to haul it all away. Instead, you could sell the items on eBay or Craigslist. Or you could hold a tag sale, or bring a car full to the church rummage sale. If you donate items to charity, you won't bring home any cash, but you probably can take a tax deduction. And don't just focus on the little stuff. Do you still use the boat you bought when the kids were teenagers? Do you have an extra car that's rusting away in the driveway, or a vacation condo or time share you hardly ever use anymore? Even if your unwanted items have greatly depreciated, it's still better to have the money now, rather than the headache of getting rid of it all later on.

3. Control your credit. As you approach retirement you should be paying down debt, not taking out new loans. You'll be living on a fixed income, with no more salary increases to cover those additional monthly payments. Credit card debt is the worst, since interest rates are high and penalties lurk around every corner. So if you're running a balance, pay it off as soon as you can, and in the meantime call the credit card company to try to negotiate a better rate. Your mortgage is probably the last debt to pay off. Don't worry too much if you carry a mortgage into retirement. You're not alone. But trust me, there's no greater feeling of security than living in a home that's free and clear of the bank.

4. Use your head when you travel. Traveling is often at the top of any retiree's bucket list. And there's no reason it shouldn't be. But a little bit of research can go a long way in saving money. If you're going to do a lot of traveling, it might pay to sign up for airline and hotel loyalty programs. Use the many resources on the Internet to comparison shop and search for hotel and resort bargains. Check out HomeAway and Airbnb for nicer accommodations at reasonable prices. Now is actually a pretty good time to travel abroad, because the dollar is strong and coverts to more foreign currency. But a lot of people save money by staying closer to home. If you take a driving vacation you can use the savings on airfare to book a little nicer place to stay.

5. Put the kibosh on your kids. You've been conditioned for years to buy things for your kids and to pay their bills. But the kids are adults now. Sure, help them out if you can afford it. But there's no law that says you have to subsidize their rent, or pony up for the down payment on a car or a house. Remember the old saying about giving your kids roots and wings. You gave them strong roots. Now it's time to give them wings, and let them fly on their own.