- Be prepared for the unexpected.
- Understand Medicare and travel insurance options.
- Know how to find medical care while traveling.
- Get your financial house in order before you depart.
Bill and Carol Beck, now in their late 70s, have traveled the world, but not all their trips abroad have been smooth sailing. Last year on a river cruise in France, Bill caught norovirus and was quarantined in his cabin for 4 days. Infectious diseases can spread quickly in a ship’s close quarters, and large cruise ships have thousands of passengers to consider. "If they had removed us from the ship, we would have been stuck on our own to find a hotel," said Bill, a retired maritime engine business owner from the San Francisco Bay Area.
The Becks are savvy travelers and have no intention of stopping. Carol's travel motto is, "If you don't go, you don't know." But she's aware that the unforeseen does happen. Taking a voyage on a famous vintage sailing vessel in the Caribbean has always been on Carol's bucket list, so she finally booked it. But when she fell and fractured her femur, they had to cancel the entire voyage. "The travel company didn't refund our deposit, but they applied it to our next trip," added Carol. "This time we've taken precautions of purchasing travel insurance and now we're looking forward to our voyage to Ireland and Scotland."
With access to time and discretionary income, many retirees are traveling abroad to see the world's epic sites and experience different cultures. But medical emergencies do happen, even on expensive tours and river cruises, so plan ahead. Here are 4 strategies to help you avoid common pitfalls retirees sometimes face overseas.
1. Be prepared for the unexpected
Like many young retirees, Don and Linda Ford, another Bay Area couple now in their mid-60s, have scaled back how much they work so they can travel more. Don, an accountant for 2 entertainment venues in San Francisco, is now mentoring his replacement, and Linda just takes on a few writing assignments a year.
Over the years, they have also learned to plan for the occasional travel mishap. "A few years ago when my father died, we had to cancel a vacation to the Netherlands," Don recalls. "We thought we were smart paying half price for the hotel, but we lost it all. Because my mother is still living at age 93, we now opt to pay more so we won't be penalized for canceling, and we always purchase travel insurance. I could invest the money instead, letting it grow until actually needed, but this way we never lose sleep at night."
Plan ahead for medical emergencies
For many seniors, traveling abroad is the culmination of years of hard work and saving for retirement. But as we age, health issues become more prevalent. "Never board a cruise ship if you're ill—it's no place to convalesce," advises Don who is a frequent cruiser. "And remember to bring your required medications."
Knowing that international travel can often come with surprises, Don and Linda always purchase the insurance waiver offered by the cruise line, so they can cancel without paying a penalty. "If the cruise line books your flights, these should also be covered. If not, arrange travel insurance through the airline. Be careful when booking hotel stays before a trip or afterward. Make sure you can cancel these without paying a penalty. Always keep insurance contact information, along with personal contact and primary care physician, numbers easily available," notes Don.
Take precautions with medications
Pack a letter from your physician describing your condition and listing your medications. Leave prescriptions in their original containers. Pharmacists overseas are often unfamiliar with American brand names, so know the generic names. Lastly, check with the foreign embassy of countries you’re visiting to make sure your medications are considered legal.
Get required vaccinations
Some countries require visitors to carry an International Certificate of Vaccination, called a Yellow Card, as proof of inoculations. Check Country Specific Information and contact the foreign embassy of the country you're visiting or transiting through for their requirements. If going on a cruise, the cruise line will let you know if any vaccinations are required after you book your trip. For more information, visit US Centers for Disease Control (CDC) and the World Health Organization (WHO).
2. Understand Medicare and travel insurance options
Do you know if your current health insurance or Medicare plan covers overseas travel? It may not. Original Medicare and Medicare Advantage plans do not cover you outside the US, so for more coverage, consider a Medigap policy. It's a supplemental insurance plan that's designed to cover gaps in coverage left by Medicare. Unlike Medicare, Medigap is not a government-sponsored insurance program. It’s sold through private insurance companies and you're responsible for purchasing the policy on your own.
What Medigap generally covers outside the US
If you have Medigap Plan C, D, E, F, G, H, I, J, M or N, your plan:
- Covers foreign travel emergency care as long as it begins during the first 60 days of your trip and only if Medicare doesn't cover the care.
- Pays 80% of the billed charges for certain medically necessary emergency care outside the US after you meet a $250 deductible for the year.
- Limits lifetime foreign travel emergency coverage to $50,000.
For more information, visit the Medigap website.
Know the difference between travel and medical insurance
Travel insurance insures your financial investment in your trip. Travel medical insurance specifically covers the costs of medical attention you may need while traveling abroad. However, some coverage may be unnecessary if it overlaps with protection that you already have in place through a homeowners, auto, life, or health insurance policy. The US Bureau of Consular Affairs provides a comprehensive list of travel insurance providers that will cover you when abroad.
|5 costs that medical insurance typically covers||5 costs that travel insurance typically covers|
|1. Emergency medical care||1. Financial investment|
|2. Hospital stays and required surgery||2. Lost and delayed baggage|
|3. Emergency evacuation||3. Canceled flights|
|4. Reimbursement of medical expenses||4. Canceled hotels|
|5. Pre-existing conditions||5. Trip interruption or delay|
Linda advises, "Be sure to include evacuation insurance that pays for getting you to the nearest medical facility, especially if you're going to someplace like Antarctica. If not, it could put a dent in your retirement savings. It usually adds about $100 to our trip expense, but it's better than having to pay $50,000 for an emergency flight home."
Tip: Know the difference between trip cancellation insurance and trip interruption insurance. Many insurances of this type can be bundled together for a single price. Consider using an online insurance broker that can provide access to a range of insurance options offered through multiple carriers. Shop around to get the best deal.
6 questions to ask your health insurance company about foreign travel:
- Are emergency expenses abroad covered?
- Does coverage include returning to the United States for treatment if seriously ill?
- Are pre-existing conditions covered?
- Are pre-authorizations or second opinions required before emergency treatment can begin?
- Does the company pay foreign hospitals and foreign doctors directly?
- Does the company provide a 24-hour physician-backed support center?
3. Know how to find medical care while traveling
If you're taking a cruise, don't assume the ship is a floating hospital. While doctors and nurses are usually available at all times, the scope of treatment can be somewhat limited. Linda clarified, "They can provide emergency medicine and dispense medications, but they're not surgeons. There are no MRIs or blood banks." If the ship's doctor determines you need surgery, you'll be dropped off at the next port.
Bill remarked, "The decision is up to the ship's doctor, not the passenger." In the US, the coast guard will airlift you to the nearest port that has a hospital. If abroad, evacuation will be handled by the military. After you recover, you'll have to find your own way home.
If you're traveling on your own, learn simple steps that can help, like knowing how to dial the "911 equivalent" in each country you visit. If you need medical help, contact the US embassy or consulate of the country you're visiting for help locating medical services. They'll be able to direct you to medical facilities where English is spoken, and help you transfer funds from the United States, if necessary. Payment for services will be your responsibility.
Tip: Linda advises, "If you need to find a doctor in a hurry, get to a 5-star hotel and ask the concierge for a recommendation."
Additional assistance while traveling abroad:
- Contact the American Citizens Services Unit at the US Embassy or Consulate
- Find an Air Ambulance/Medical Evacuation Company
- US Passports and International Travel
- International Travel
4. Get your financial house in order before you depart
Many retirees ask their financial advisor if they can afford to take an expensive cruise or travel to a "once in a lifetime" destination. The key to answering that question usually hinges on adequate retirement income planning and knowing how the trip will be funded.
For many retirees, retirement income strategies have been developed so they can cover their essential expenses with guaranteed sources of income such as Social Security, pensions, and annuities. For most people, including the Becks and the Fords, travel is considered a “discretionary expense” and is generally funded by other assets, income, or retirement savings.
Bill and Carol Beck are both over age 70½, so they're required to take minimum distributions from their 401(k)s and IRAs every year, even though Bill still earns an income from his business. Bill comments, "Because I’m over the Social Security full retirement age, there are no restrictions on earning an income while collecting Social Security benefits, so I can justify earmarking some of these funds to upgrade our travel experiences."
When asked how they were able to ease into early retirement, Linda said, "We've both always been conscientious about putting aside the maximum allowed in our retirement accounts and taking advantage of the 401(k) matching programs offered by our employers. The value of our investments has grown substantially over time, so we can afford to start working less and traveling more."
Don added, "I’ve rebalanced my retirement accounts, moving from predominately growth to more income-earning securities, so I’m allocating money to pay for my essential expenses from dividends, not principal." Linda commented, "Right now my plan is to limit my spending to about 4% a year, leaving more of my investments in growth funds since we are planning to live another 20–25 years in retirement."
Read Viewpoints on Fidelity.com: How to manage cash flow in retirement
Broaden your horizons
For many people, travel can be a well-deserved reward later in life that opens up new worlds and experiences. Linda said, "Preplanning helps you sidestep the pitfalls so you can take advantage of close-up encounters with the world's incredible creatures, cultures, and sites. I think everyone deserves a retirement brimming with travel tales." She recounted a few travel highlights of her own; "Off the coast of Mexico, hundreds of dolphins followed alongside the ship. It was a spectacular sight. Every day on our voyages to the Baltic Sea and Asia, we woke up in a different country and got to experience different societies firsthand without having to pack and lug suitcases to every new city we visited."
Carol Beck added, "We've had the good health and good fortune to be able to visit ports less traveled, like Iceland and the Galapagos Islands. For us, travel isn't just an indulgence; it's a quest to broaden our experiences and open our eyes to different cultures."
What to do 6 months prior to your departure:
- Book your trip, flights, hotels, excursions, and activities. (Generally, try to book airfare mid-week to save money.)
- Purchase medical and travel insurance.
- Have a medical checkup to make sure you're in good health.
- Make sure your passport is valid through the time you'll be abroad. (Note: Some countries require passports be valid 6 months after the flight date.)
- Check visa requirements and apply if needed.
- Find out which vaccinations you'll need—and get them.
- Make sure your will and power of attorney are in order and easy to find.
What to do 3 months prior to your departure:
- Contact foreign embassies to make sure your prescriptions are considered legal. Also ask about local laws and customs that may affect you.
- Notify your bank that you will be using your credit card overseas.
- Put your bills on autopay.
- Save copies of your passport, key documents, and passwords.
- Buy 1 rolling suitcase and limit yourself to it.
- Create a packing checklist. (Plan to take fewer clothes and do laundry more often.)
- Make a copy of your visa and pack it in your suitcase.
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