Managing Your Retirement Financial Plan Amidst Change

While it is hard to predict the future, you can always count on change occurring. Preparing for future changes so you can manage them in your retirement is an essential component of your financial planning.

Taking the time to understand healthcare coverage, costs, and needs, and considering how those might change, can help you build a sustainable financial plan with room for flexibility to account for travel, hobbies, or other lifestyle considerations.

Healthcare costs can look different in retirement

For ASEBP covered members who are accustomed to health benefits during their working years, understanding how coverage changes through retirement is an important consideration of the broader financial picture.

Canada’s public healthcare system provides an important foundation for provinces and territories to administer care to all residents. For example, the Alberta Health Care Insurance Plan covers medically necessary physician services and certain other insured services. Other government programs like the Coverage for Seniors Program may provide additional assistance depending on age, eligibility, and the type of expense.

While the public healthcare system provides a strong base, it does not cover every health-related expense a household may encounter. Costs for things such as prescription drugs, dental and vision care, health practitioners, medical equipment, and other health-related needs over and above what is covered by a provincial or territorial health care plan still need to be planned for.

Additionally, unplanned treatment can impact retirement finances. A predictable dental cleaning, for example, is different from an unexpected course of treatment or a large ongoing prescription expense. Both cost money, but they are different financial considerations.

It can help to separate routine healthcare spending from costs that could have a more significant impact on retirement finances. You can prepare for those costs in several ways.

Some retirees value supplemental health coverage because it can make certain expenses more predictable. Others are comfortable paying more costs directly from retirement income or savings. A combination of coverage and personal funds is another possibility.

The trade-off is often between predictability and flexibility. Insurance premiums create a regular expense, while paying out-of-pocket means accepting more variability in exchange for not paying those premiums. Deductibles, co-payments, coverage maximums, exclusions, and how often someone expects to use particular services can all influence that calculation.

What works today may not always be the best fit. Healthcare needs, available programs, and coverage can all change. Reviewing these assumptions periodically can be just as important as making the initial decision.

The practical question is simple: “What is covered, what might I have to pay for myself, and how comfortably could my retirement finances absorb the difference?”

Travel freedom as a financial side

For many people, having more freedom to travel is one of the things they look forward to most in retirement.

Without a work calendar determining vacation time, travel can take on a different shape. A two-week holiday might become a month away. Visits with children, grandchildren, or friends may become more frequent. Some retirees may want to spend part of an Alberta winter somewhere warmer.

If travel is important to you, it deserves a place in the retirement plan just like any other meaningful goal.

There are obvious costs – airfare, accommodation, food, transportation and activities – but longer or more frequent trips can mean allocating more of the retirement budget to travel, particularly during years when you are most active.

Healthcare while away deserves consideration too.

Alberta residents retain important provincial health coverage, but that does not mean every medical expense incurred elsewhere will be fully reimbursed. Outside Canada in particular, the amount charged by a hospital or physician can be considerably higher than the amount a provincial health plan reimburses.

Travel medical coverage can help address that gap, although all policies are not alike.

Trip-duration limits, emergency benefits, deductibles, exclusions, and provisions dealing with pre-existing medical conditions can differ from one plan to another. The needs of someone taking one or two short vacations each year may also be quite different from those of someone planning frequent trips or extended stays.

Age and medical history often affect the availability, cost, and terms of travel insurance coverage. For retirees who place a high value on being able to travel freely, understanding how coverage works overtime can help prevent an unexpected restriction from interfering with your plans.

It can also be helpful to understand common travel insurance terms. A stability clause requires a medical condition to remain unchanged for a specific period of time before travel. Additionally, a non-age-capped plan does not impose coverage restrictions based on age. Knowing these terms can help make it easier to compare coverage options and help you choose a plan that aligns with your travel goals in retirement.

If travel is an important part of your retirement plans, understanding your medical coverage while away is just as important as budgeting for the trip itself.

None of this is meant to make travel sound complicated. In fact, understanding the financial and healthcare side beforehand can make it easier to travel with confidence and enjoy the freedom retirement can bring.

After all, retirement planning is not only about preparing for unexpected expenses. It should leave room for the things you have spent years looking forward to.

Building flexibility into a long retirement

Security matters in retirement. Knowing that regular income will arrive each month can make housing, groceries, utilities, and other recurring expenses easier to manage.

At the same time, life rarely follows a spreadsheet.

A major home repair may happen unexpectedly. Family members may need help. Travel plans can change. Healthcare needs may evolve. Inflation can gradually increase the cost of everyday life.

Accessible savings can provide room to respond to those changes without having to rethink an entire financial plan. Health or travel coverage can serve a different purpose by transferring some financial risks rather than leaving every unexpected expense to be absorbed personally.

The balance will look different from one household to another. Someone with substantial pension income may view personal savings differently from someone whose retirement income relies more heavily on investments. A frequent traveller may place more value on certain coverage than someone who rarely leaves their province or territory of residence.

The right balance depends on which expenses you want greater certainty around and where you would rather keep your options open.

It is also worth remembering that the retirement you imagine today may not be the retirement you are living in 10, 15, or 20 years from now.

Travel and recreation may account for more spending during some years. Later, housing preferences or healthcare needs may become more important. Some people remain happily in the same home throughout retirement; others eventually downsize, move closer to family, or choose a home requiring less maintenance.

Inflation continues throughout all of those years. Even modest increases in groceries, utilities, travel, and services can add up over a retirement lasting several decades.

Family circumstances change too – a spouse may become ill or pass away, children or grandchildren may need financial help, an inheritance may arrive, or an anticipated inheritance may not.

You do not need to predict which of these things will happen. The value is in having a flexible plan to help you adapt to change.

Revisiting income needs, savings, healthcare coverage, travel plans, and other assumptions periodically can help keep the plan connected to the life you are actually living.

How ASEBP supports you

Retirement needs can change over time, which is why it is important to have coverage that can adapt alongside those needs. ASEBP’s MyRetiree Plan offers a range of coverage options to help support your health and wellness needs throughout retirement, while giving you flexibility to adjust coverage as things change.

If you are planning to travel during retirement, ASEBP’s MyRetiree Plan includes travel coverage with no age cap and no stability clause, allowing you to travel with confidence and fewer restrictions.

Not sure which plan is right for you? Start with the MyRetiree Plan Finder to explore your options and find the coverage that makes sense for your needs.

As an ASEBP covered member, you also have unlimited access to financial advice through your Employee and Family Assistance Program (EFAP). For example, you can call with questions about estimating how much you may need for retirement and how long your savings may need to last, understanding your retirement income sources, or how decisions about the Canada Pension Plan (CPP), Old Age Security (OAS), and personal savings could affect your finances. A financial professional can help you explore different scenarios, understand your options, and identify practical next steps based on your circumstances. This service is available to you at no cost. Visit asebp.ca/efap to learn more and register for your GreenShield+ account.

The information provided through the Ask an Expert Hub is for personal use, reference, and education only. It is not intended to provide personalized medical, mental health, legal, financial, or other professional advice. Members should consult an appropriate health care provider, pharmacist, financial professional, legal advisor, or qualified professional before making decisions related to their individual circumstances.