Once you retire, should you pay out of pocket for health-care expenses or purchase a private health-care plan?

A private plan typically covers vision care, dental care,¹ physiotherapy, chiropractic care, hearing aids and other health costs.

Here are key reasons why different retirees make their choice.

Choosing out of pocket. Some retirees expect to enjoy reasonably good health, so they don’t see the need for a private plan. Others want to know that money spent on health care is for actual expenses and not for premiums that aren’t guaranteed to be the better choice financially.

Choosing private insurance. Many retirees would rather budget for regular monthly insurance premiums than potentially face significant health-care bills that may arise unexpectedly and often. Some retirees feel content knowing they’re ahead financially in years when their premiums are less than their health bills, and in years when their premiums are greater than their claims, they have the blessing of good health.

To help choose, one strategy is to track your actual health expenses for one or two years and compare the costs to insurance premiums. Keep in mind it’s only a guide, as health costs may vary greatly over time.

¹ Some retirees may be eligible for the Canadian Dental Care Plan.